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DEVELOPMENT: Plant a Tree Today, Save a Dollar Tomorrow

Emad Mekay

WASHINGTON, Jun 29 2005 (IPS) - Putting money into projects that conserve the environment is a smart investment that could lift millions of people around the world out of poverty while giving governments healthy economic returns, a new study finds.

"We have looked at a range of investments in environmental management, and for most measures concluded that they make economic sense," said Olav Kjorven of the United Nations Development Programme (UNDP) which ordered the study.

"The return on these investments, in terms of poverty reduction, health or productivity of resources, is substantial," he added in a statement.

The findings are part of a broader study by the Poverty-Environment Partnership (PEP), a U.N. programme that works to help poor countries reach the so-called Millennium Development Goals (MDGs).

The MDGs are a set of ambitious development targets that seek to cut world poverty and hunger in half; provide universal primary education; reduce child mortality by two-thirds; cut maternal mortality by three-quarters; promote gender equality; and reverse the spread of HIV/AIDS, malaria and other diseases, all by 2015.

The goals were agreed on at the Millennium Summit in September 2000.

Environmental projects have traditionally been seen as secondary to more pressing needs like creating jobs and expanding exports from developing nations.

But the report gives support to the idea that a healthy environment is not a "luxury good" that poor countries can do without, but an essential part of strategies to reduce poverty and foster sustainable growth.

The findings were echoed by William Jackson, director of the World Conservation Union (IUCN), who told the U.N. meeting that investing more in the environment will help achieve all the MDGs.

"Investing in environmental sustainability, rather than being a ‘tax on development’ or an ‘add-on’ to the development agenda, is an effective and efficient intervention and leverage point," Jackson said in his statement.

For this approach to work, the report says that governments around the globe need to give more incentives to businesses and non-profit organisations to invest in environmental action.

The report says that governments could allocate part of the more than one trillion dollars they spend per year on subsidies for the agriculture, energy and water sectors to environmental conservation projects. The total amount of official aid to developing countries in 2004 was about 79 billion dollars.

"Even if only 10 percent of existing subsidies were redirected to sustainable development, we could double finance for poverty reduction, rather than continue to reward environmentally-harmful practices," said Joshua Bishop, senior adviser for economics at the IUCN.

The findings of the Poverty-Environment Partnership on subsidies has become particularly relevant as finance ministers met in New York for the U.N. High-level Dialogue on Financing for Development Jun. 27-28. The meeting discussed ways to devote more financial resources to the MDGs.

Independent environmental groups say that they have spent years lobbying for this approach to be adopted by governments and international investors.

"In general, we agree that many investments in environmental protection have significant economic returns," said Aaron Goldzimer of Environmental Defense, a New York- based advocacy group.

"In many cases, these returns are particularly important for the poor, who often are the most directly dependent on natural resources," he said.

For example, the report says that the cost of a 15-year project to combat land degradation is between 16 billion and 36 billion dollars, but carries potential benefits of 53 billion dollars in saved agricultural production.

Other benefits include improved food security, reduced labour demand, thus freeing millions of rural children to attend school, and less pressure on arable land and vulnerable natural habitats.

Contrary to the view of some in the business community who say that the cost of protected areas could be dauntingly high, now at about 10 billion dollars per year, the report says that protected areas through sustainable fisheries, tourism and commodity production offer opportunities to reduce poverty.

Protected areas also provide an essential buffer of wild foods and medicine in times of hardship, the report finds, while they could be a cultural touchstone offering aesthetic and spiritual comfort to all.

"The bottom line is that investing in the environment makes economic sense, especially for the poor, while the necessary policy, governance and institutional changes are within reach," says the report.

But a source with an environmental group who wished to remain unidentified said that despite "some interesting findings" of the report, it was not clear whether the recommendations would be convincing to governments and investors.

"These agencies are constantly putting out reports and they often don’t get read or promoted very well," the source said, adding that this report may be only slightly different because it focuses on the MDGs.

"The MDGs do have at least a bit of weight behind them, and since it sounds like the report is in the context of the MDGs, maybe some of its findings would find a life after publication," he said.