What we measure matters: a key to reducing inequality and environmental degradation

The health of an economy is rooted in the health of the environment. And in countries around the world, the health of both is faltering. The global economic outlook is increasingly uncertain, the natural world is being degraded and income and consumption inequality is on the rise.

Yet this interrelated relationship is largely invisible to governments, industries and the population at large, who continue to consume nature’s bounty typically without recognising its value or allowing it to regenerate once exploited.

Even for those of us who are one step removed from nature in our present-day lives, looking back on places we called home as children can reveal disturbing truths. This is certainly true for me.

I grew up in a small mining town in Zimbabwe called Kadoma, and as soon as school was out, my parents would bundle me off to Mhondoro, a rural area to the south. There, I herded cattle across the quintessential untamed African savannah.

I loved being in Mhondoro. In its river I learnt to swim and to catch fish. I had my first adolescent crush on a girl in that village. The surrounding forests were lush, teeming with wildlife; rivers were bountiful, full with fish and fowl in the pure fresh water. City folk went home with their “hands full” of these gifts from nature.

Today, my village in Mhondoro is heart-breaking. The lush forests and wildlife are gone, replaced with dry fields. The river is dry. I now bring my own food and bottled water when I visit. And worst of all, the people are poor, and have few if any options for bettering their lives.

Tragically, the story of my village is shared by thousands of villages across Africa that are suffering the worst impacts of climate change, population growth and development choices.

To feed themselves and generate cash income, farmers, like those of Mhondoro, expanded their crops into wild lands and forests, bringing their families into dangerous conflict with wildlife, while at the same time destroying the forests and fertile soils that support their agricultural bounty. This expansion continues: the continent’s 33 million smallholder farmers remain impoverished, their yields in some crops just 20% of global averages.

But this outcome is not inevitable. These same farmers’ choices are driven by what is valued in markets and can generate financial returns. We have known for a long time that this short-term calculation does not lead to the best long-term outcome for people or for nature, especially when these choices are aggregated. Because what we measure affects what we do, we need a metric for societal progress that better reflects the factors underlying human wellbeing.

The standard methods of Gross Domestic Product (GDP) accounting fail to acknowledge biodiversity and nature’s contribution to people as essential for livelihoods. Yet, nature’s contribution to people such as grazing land, fresh water and forest products account for 47% of household income in India, nearly 75% in Indonesia and 89% in Brazil’s Northern Amazon.

This means that the poorer sectors of society are disproportionately dependent on their natural ecosystems, and disproportionately harmed by their loss. Furthermore, poor countries face a double whammy: while they are depleting their natural resources, they are investing less in other forms of capital such as health and education, thereby perpetuating the cycle of poverty and inequality.

Economists have shown that excluding nature from wealth accounting has significant impact on the poor and are advocating a new metric called the inclusive wealth index. This index includes all the natural resources on which people depend for their livelihoods, as well as other types of capital stock (produced and human capital) which together determine the sustainability of our economies.

The recently released UN Environment Inclusive Wealth Report finds that inclusive wealth is declining in more than one third of countries surveyed (44 of 140) even though GDP has increased in most of them. Clearly, the rise in global income is coming at the cost of lost “natural capital” - such as water, clean air, forests and biodiversity. This finding is particularly troubling for the world’s 900 million people who depend on nature for more than one-third of their food and income.

To include these natural resources into their accounting, countries can draw on work undertaken by institutions such as UN Environment through ‘The Economics of Ecosystems and Biodiversity’ (TEEB) and particularly recent work on TEEB for Agriculture and Food. This provides a framework for accounting for nature and captures all traditionally hidden impacts while breaking our narrow focus on measurements such as GDP and ‘per hectare productivity.’

Nations can also look to examples emerging in other parts of the world. Costa Rica, for instance, had lost almost 80 percent of its rainforest cover by the 1980s. Only then did the country change course, establishing strong environmental governance and incentives for conservation. As a result, despite a doubling of population, income per capita has tripled and forest cover is now over 50%.

To achieve sustainable development, villages like Mhondoro will need help protecting and restoring nature to regain the benefits that were enjoyed in the past and help too to protect those benefits from market forces hungry for agricultural commodities as trade expands. It is not too late.

As I think of my village in Zimbabwe, I know that large scale expansion of croplands into pristine forests and wildlife habitats is a race to the bottom. Our existence depends on nature’s capacity to sustain agriculture and livelihoods, and we must now face the facts: we cannot solve the crisis of rural poverty and hunger without also solving the crisis of nature. Ensuring that economic accounting measures the livelihood basis of poor farmers, including environmental assets and liabilities, points us in the right direction.

Maxwell Gomera is a Director of the Biodiversity and Ecosystem Services Branch at UN Environment and a 2018 Fellow of Aspen New Voices. He is an expert on public investments in agriculture and nature. Twitter: @GomeraM