Recovering and developing with nature

Finding the origin of the coronavirus, which can help experts develop preventive measures to stop its spread and reduce its public health and economic risks, can still take some time, according to the WHO (World Health Organization). But for environmentalists, it is clear that nature, with the interactions of its parts, has an important role in the spread or containment of infectious diseases. A common pathway is: Liquid droplets from the sneeze of an infected person float in air and transmit the virus to another person who does not have a protective mask in an environment conducive to transmission. Nature is clearly visible there. Hence, to recover from coronavirus, we must do so with nature, its biodiversity and processes, in mind.

June, our Environment Month, should remind us that nature, the core of the environment that is essential for our survival, is crucial not only for our recovery from COVID-19 and for coping with the looming climate crisis that can potentially cause more harm to us. Our natural capital is an indispensable resource for the sustainable development of our country. But we must recognize its value and account for it.Natural capital (which we refer to with its nickname NatCap), human capital and manufactured goods and services are the three basic forms of capital needed for a country’s development. But countries of planet earth, which could not be habitable without nature, have not been including NatCap in economic calculations. Valuation and accounting of natural assets are not easy tasks to do, especially when natural assets are considered as an ecosystem—a community of natural assets that interact with each other, such as rivers and oceans.

Manufactured goods

So we have been using Gross Domestic Product (GDP) to account for manufactured goods and services. Human capital is also included in such measure or is more directly measured.

Fortunately, ecologists, economists, scientists from various fields, as well as some policy and decision makers realized a few years back that NatCap is too valuable to be ignored.

Noted economist Prof. Sir Partha Dasgupta said at the ASEAN-UP COP 26 webinar held on June 8 that GDP is “completely worthless” in planning for our economic future because it does not consider depreciation of NatCap. Hence, although natural capital accounting (NCA) is not easy to do, there is now increasing attention on it globally.

Economist E.F. Schumacher was the first to use the term “natural capital” in 1973 in his book “Small is Beautiful.” In 1991, Nobel Prize awardee Kenneth Arrow, from whom I learned Economics 101, developed the knowledge foundation that applies both ecology and economics on the valuation of NatCap. Robert Constanza and Herman Daly developed the field further and related “Natural Capital and Sustainable Development” in 1992.

In 1996, pioneering case applications of NatCap valuation started in Costa Rica and New York. In 2006, Stanford University launched its Natural Capital Project, a collaborative project with the Chinese Academy of Sciences and other institutions. This project is the one that gave NatCap its nickname.

The business community also launched at the Rio+20 Summit in June 2012 the global initiative of 40 CEOs, “Natural Capital Declaration,” to “‘integrate natural capital considerations into loans, equity, fixed income and insurance products, as well as in accounting, disclosure and reporting frameworks.” It aimed to “increase understanding of business dependency on natural capital assets; support development of tools to integrate natural capital considerations into the decision-making process of all financial products and services; help build a global consensus on integrating natural capital into private sector accounting and decision-making; and encourage a consensus on integrated reporting to include natural capital as one of the key components of an organization’s success.”

Sustainable development

Nine years after, how many in our business sector have heard of this declaration?

It is alright if only just a few have, because even my outstanding accountant friend has not heard of anyone practicing NCA. She thinks it will take some time before it is accepted universally due to the absence of NCA standards.

But some members of our Climate Crisis and Sustainable Development Network (CCSDN), which grew out of the MAP Sustainable Development Committee, have been involved in related projects using the UN System of Environmental Economic Accounting (SEEA). And we learned that House Deputy Speaker Loren Legarda drafted a bill on this topic when she was still a senator. So we decided to help revive it.

Our CCSDN Group on Recovering with Nature cochaired by Dr. Ciel Habito, MAPper and former Socioeconomic Planning Secretary, and Atty. Ipat Luna, DENR (Department of Environment and Natural Resources) official detailed to Rep. Legarda’s Office, with some Filipino experts on environment, economics, and related disciplines, such as Dr. Marian delos Angeles, worked with Rep. Legarda to update her bill.

The result is the Bill on the Philippine Ecosystem and Natural Accounting System (Pencas), which Rep. Legarda sponsored in April 2020 as House Bill No. 9181. This bill recognizes the critical role of NatCap in our country’s sustainable development. It also identifies the roles of various government agencies in NCA, especially that of the Philippine Statistics Authority (PSA). It also provides funding to support the implementation of the PENCAS.

Guiding angels

Our “guiding angels” in this work, Prof. Gretchen Daily, cofounder/Faculty Director of Stanford’s NatCap Project and her team, have been keeping us up-to-date on the practice of NCA and its applications in some countries. They have given us inputs to our work in progress—an electronic compendium of presentations on NCA from local and foreign specialists.

The work ahead requires support and cooperation of all—policy makers (to transform the bill into a law), PSA and other professionals (to adapt the United Nations SEEA on the Philippine case), business and civil society organizations and ordinary citizens (to help in the valuation and accounting work) and decision makers and operations staff (to treat NatCap as part of the assets they manage).

We must include NCA in our priority list of actions for our country’s recovery and development. Since we are a maritime and archipelagic nation that hosts the global center of marine biodiversity, we must give priority attention to the application of NCA to our water bodies—account for our bio-diverse marine assets; develop nature-based solutions to both water shortages and overflows, and direct increased investments in protecting, conserving and sustainably using our water resources. INQ

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. The author is a Life Member of MAP, is former Chair of the MAP Sustainable Development (SD) Committee. She is Convenor-Chair of CCSDN and serves as Board Director of organizations on climate change, SD, science and technology, education, and maritime affairs.

Source: https://business.inquirer.net/324934/recovering-and-developing-with-nature#ixzz6xoYayjOB
Written by: Dr. Corazon “Cora” PB. Claudio