Inc. Sliding Into Bankruptcy
By Stephen Leahy
29 May, 2007
May 29 (IPS) - Build a shrimp farm in Thailand by cutting down
mangrove forests and you will net about 8,000 dollars per hectare. Meanwhile,
the destruction of the forest and pollution from the farm will result
in a loss of ecosystems worth 35,000 dollars/ha per year.
Many leading development
institutions and policy-makers still fail to understand that this ruthless
exploitation for short-term profits could trigger an Enron-like collapse
of "Earth, Inc.", experts say.
For example, the World Bank
and other economic development agencies would happily loan a shrimp
farmer 100,000 dollars to clear more mangroves.
All economies depend on the
natural capital lying within nature's lands, waters, forests, and reefs,
but humans have often treated them as if they had little value or were
"Up till now, humans
have been exploiting natural capital to maximise production of food,
timber, oil and minerals at the expense of soil, water and biodiversity,"
said Janet Ranganathan, director of people and ecosystems at the Washington-based
World Resources Institute.
"Usually only a few
people benefit from this exploitation," Ranganathan, who co-authored
a new report called "Restoring Nature's Capital: An Action Agenda
to Sustain Ecosystem Services", told IPS.
Worse still is that this
approach to nature is extremely destructive and short-sighted, she said.
Since 1980, nearly 35 percent
of the world's coastal mangroves have been cut down, most often for
shrimp aquaculture. Vietnam, for example, has lost over 80 percent of
its coastal mangroves to such operations.
The 2004 Indian Ocean tsunami
that killed nearly 230,000 people provided ample evidence that mangroves
can protect or at the very least buffer communities from the worst impacts
of tidal waves and storms.
Unfortunately, that particular
"service" is not captured or valued by the marketplace, said
Nor does the market value
the vital role mangroves play as a nursery habitat for marine life,
crucial to the health of offshore fisheries, or the service they provide
filtering pollutants which in turn protect coral reefs, another important
nursery for fish. Ignored as well are the substantial economic benefits
mangroves provide in preventing the shoreline erosion that is threatening
many coastal countries like Thailand, where the shoreline is retreating
25 metres each year in some areas.
Nature's services, which
are as real as any shrimp platter, are simply left out of the current
economic system. Also ignored are the environmental and social costs
of shrimp farming such as water pollution, land degradation and impacts
on local fishers.
"Studies show that shrimp
farms in southern Thailand have a lifespan of just five years,"
Ranganathan said. "If we valued ecosystems properly, it would change
how we make development decisions."
After five years, the water
is too polluted to raise shrimp and the operation moves down the coast.
Such operations are often subsidised directly and indirectly with nominal
land rent, taxes and even development grants and loans. When the real
costs of shrimp aquaculture are taken into account, its value is 5,443
dollars per hectare, according to an in-depth analysis.
Meanwhile, the real value
to society of intact mangroves is a whopping 35,696 dollars per hectare.
While the actual value of
ecosystems and the services they provide can sometimes be hard to calculate,
the fact of the matter is that they are not zero, says Ranganathan.
Of all places, New York City
figured that out some years ago.
New York's tap water has
never passed through a filtration plant and is considered some of best
quality water available in any U.S. city. In the late 1980s, rather
than building a six- to eight-billion-dollar water treatment plant,
the city decided it was far cheaper and better to protect and restore
the source of its water supply, the Catskill/Delaware forests and wetlands.
The total cost? One and a
half billion dollars. And that's without subtracting the considerable
value of the additional services the protected area provides in terms
of human recreation, better air quality, and carbon sequestration.
Sadly, this approach is all
too rare, as evidenced by the Millennium Ecosystem Assessment (MA),
the first global scientific audit of the Earth's natural capital.
In 2005, the MA showed that
15 of the world's 24 ecosystem services are being degraded or used unsustainably.
In business terms, this meant that nearly two-thirds of the "company's"
24 divisions examined are in the red; only four are profitable, while
the other five showed mixed results regionally.
Clearly, "Earth, Inc."
is in deep trouble.
Improvements in technology
and modernisation won't rescue our planet from the depletion of the
Earth's natural capital, says Eugene Rosa, a professor of natural resources
and environmental policy at Washington State University.
Rosa and colleagues have
developed a scientific model called STIRPAT to assess human interactions
with the environment. They determined that natural capital will continue
its sharp decline due to growth in population and consumption.
Even if nations increased
their energy and resource-use efficiency four-fold, there isn't enough
natural capital left intact to continue business as usual, Rosa said
in an interview.
"This really isn't a
surprising result, but there has been little discussion about population
and consumption patterns," he said.
North America and European
lifestyles are simply not sustainable, he says. Other analyses have
demonstrated the need for four or five more planets if everyone lived
like the average U.S. citizen.
And let's not forget that
climate change -- the dumping of vast quantities of carbon from the
burning of fossil fuels into the atmosphere -- is another unaccounted
cost that's having a major impact on ecosystem services.
"Lima in Peru, for example,
is entirely dependent on water from glacial melt," noted Jonathan
Lash, president of WRI.
"[But] the glaciers
will be gone in 20 years," Lash said in a statement.
Solutions for Lima, such
as a pipeline to the Amazon River or building energy-intensive desalination
plants, are also vulnerable to changes in climate.
Lash urges a focus on how
climate change is altering ecosystem services.
Turning around this dreadfully
managed and exploited company "Earth, Inc." will be an enormous
task, requiring fundamentally new approaches to managing its precious
and declining assets "upon which all life depends", the WRI
The question now is whether
humanity is psychologically ready and willing to accept such fundamental
*This article is part one
of a three-part series on natural capital and how future global prosperity
and equity can be achieved through the preservation of ecosystems
Copyright © 2007 IPS-Inter
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