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ASEAN GDP needs to Reflect Biodiversity Value (TEEB)

Thursday, April 5th, 2012

The first Southeast Asia Regional Policy Dialogue on the Economics of Ecosystems and Biodiversity proved to be the right platform provided by the Asean Centre for Biodiversity (ACB) and the British Foreign and Commonwealth Office for the members of the Ecosystem Services Economics (ESE) to introduce to Asian Governments two key concepts that are critical to their economies when calculating their GDP.

The open-house between government representatives of Indonesia, Singapore, Brunei, Malaysia, the Philippines and ESE members was held in January 2012 at Makati, the Philippines. The dialogue was held to introduce to regional policy-makers the necessity for inclusive GDP (Gross Domestic Product) evaluation by including the ecosystem services, or ESS, since “only 7.3 percent” of the conventional GDP was added, while in reality it was 57 percent of “GDP of the poor.”

Chief of the ESE, Pushpam Kumar, and ACB Executive Director Rodgrigo Fuentes. speaking at various points of the dialogue, emphasized that “TEEB [The Economics of Ecosystems and Biodiversity] and PES [Payments for Ecosystem Services]” are two high-impact tools which will give Asian economies the capability “to assess the economic impacts associated with losing natural capital.”

Elaborating further on the topic, Kumar said that, “The productive base of the economy continues to be eroded without being reported and accounted. Indicators like GDP are distorted and do not reflect the changes in the level of welfare; growth accounting does not incorporate ESS, leading to erroneous sense of gain and/or losses; and, drivers like trade and investment impacting the ecosystems have far reaching impact for society.”

Giving a brief background on the necessity for these two assessment tools, Kumar said that nearly across the participating countries, nearly 540 million people were involved in farming, informal forestry, animal husbandry and fisheries; the growth in GDP impacts the ecosystem and there is degradation in the resources that are available for these traditional livelihoods. Making an emphatic statement, Kumar said that, “The replacement of that ESS is beyond the capacity of the poor: they would need to spend twice their incomes.”

Taking the dialogue further, Fuentes added that, “We are also reviewing climate change and biodiversity action plans, and identifying approaches to integrate TEEB [The Economics of Ecosystems and Biodiversity] and PES [payments for ecosystem services] into such plans.”

Explaining the importance of TEEB further, Fuentes continued that, ”The TEEB outlines the cost of policy inaction and finds that under a ‘business as usual’ scenario, an average year’s natural capital loss would lead to a loss of ecosystem services worth around US$2 trillion to $4.5 trillion over a 50-year period.”

The problem with present day GDP accounting fails to account for the loss of values of some aspects of the economy. Stressing the need for immediate informative decision-making as vital to governments to arrive at actual GDP in the face of ecosystem loss, Fuentes rued that it would lead to “wrong choices and decisions in addressing sustainable development challenges.” Repeatedly stressing the need to incorporate the ecosystem, Fuentes reiterated the need for participants to involve respective governments to adopt the TEEB and TEP.

Leaving the dialogue on a positive note, Fuentes said that local governments have to make the move towards this policy, “At the end of the day, it would have to be the governments who decide if they seriously want to pursue a brighter future for all Asians. For the Philippines, it’s high time, since we’ve been given several wake-up calls, the latest of which was the tragedy in Cagayan de Oro [and Iligan City].”

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