As I wait for my early morning flight to Peru to take off, I am handed El Comercio, Peru’s national newspaper. The main headline translates as “GDP projections forecast a stable economy.” I flip through the paper, eventually finding a well-hidden article entitled “CO2 concentration reaches 400 parts per million in the atmosphere.”
The contrast between these two articles — the first extremely optimistic about economic growth, the second predicting an alarming future if humanity does not act immediately to reduce greenhouse gas emissions — sums up exactly why our trip to Peru is so important.
I am going there as part of a team working on the Ecosystem Values Assessment and Accounting (EVA) project, a collaboration between CI’s Moore Center for Science and Oceans, CI-Peru, the World Bank and the Peruvian government.
The impetus behind our project is this: As long as economies fail to account for humanity’s reliance on nature, they will never accurately reflect how well or how badly a country is performing.
For example, take GDP — the market value of the annual balance of the goods and services that a country has produced and traded. This indicator, while important, cannot be used to reflect how a country is managing its renewable natural resources that are crucial for human survival. Nor can it be used to reflect well-being, as it does not capture how a country’s wealth is being distributed among its citizens.
Globally, GDP has grown steadily in our recent past, yet we are facing a severe financial, social and environmental crisis. That is why countries must strive to account for both ecosystem goods (natural resources such as water, timber and fisheries) and ecosystem services (important benefits such as flood regulation and erosion control.) This is certainly a challenging task, and one that is fairly new in the field of environmental economic assessments.
Traveling with three CI colleagues (Daniel, Miro and Hedley), my trip to Peru is setting the wheels of our next research adventure in motion. Over the next two years, our goal for EVA is to test potential methodologies to incorporate the value of ecosystems and their services into the System of National Accounts (SNA) of a country.
The SNA is probably one of the most important tools a country has for evaluating its economic performance; indicators like GDP are derived from the SNA statistics. Yet the SNA currently fails to properly quantify the role of nature in economic production.
Fresh water is a case in point. Though crucial for the agriculture, manufacturing, mining, energy and household sectors, few countries have established a systematic means to measure water use. As a result, they have a limited understanding of the dependency of different economic activities on water, and how their current use may be unsustainable given nature’s diminishing capacity to provide this critical resource in the future.
Accounting for nature is especially critical for countries like Peru, whose economy is heavily linked to natural resources.
We arrive in Lima late in the evening, where we meet the fifth member of our team: Dr. Lars Hein from the University of Wageningen in the Netherlands. Dr. Hein, one of the few experts working on biophysical modeling of ecosystem goods and services, will help inform their inclusion in the accounting format.
The second day we are received by our CI-Peru colleagues, who have developed a great knowledge and understanding of the region through the many projects that CI-Peru has operated with the government. Together, we depart to the proposed site for our case study: San Martín.
Our purpose in San Martín is to determine its viability as a case study for our project. A preliminary ranking of potential site candidates in Peru suggests that this region is ideal given the diversity of ecosystem services provided by a wide range of biomes in the region (e.g., mountain forests, floodplain, dry forest); the availability of datasets that have been produced in recent years (e.g., land cover, land use); and, just as importantly, the overlap with other current investments and projects in the region.
Over the next two weeks, we take field trips to the high páramos and cloud forests of the Alto Mayo Protected Forest and the tortuous flooded forests in the lower parts of the basin. We engage with representatives from local businesses — producers of agricultural commodities such as coffee, stevia, rice, and even charcoal bricks made from coconut. We also meet local communities that depend on the flow of ecosystem services, including Awajún groups who have lived in the Peruvian Amazon for millennia and now are struggling to preserve their culture and traditions.
On the side, we also discover the fantastic gastronomic options of the local cuisine, full of exotic fish, fruits and even insects. Yes, we gain 10 pounds each, but that is material for a second blog (or for many sessions at the gym).
By the end of the trip, San Martín proves to be an ideal testing ground to explore the relations between natural capital, ecosystem services and their inclusion in economic accounting systems.
In addition to community support, there is strong political buy-in which will be critical if we hope to eventually convince the government to adopt changes in their accounting systems. We are glad to find that San Martín presents us with a welcoming sociopolitical setting.
The scope of our goal is as challenging as trying to identify the colorful birds that Miro, Hedley and Daniel so diligently observe with their binoculars. It requires patience and dedication, detailed observation and imagination, and rigorous analysis. The truth is, we are on the forefront of research and innovation — a situation that brings its own challenges, but also much excitement.
Our trip ends with a well-deserved splash at the Ahuashiyacu waterfall. Indigenous religions consider waterfalls sacred because they re-energize the human spirit. After such a wonderful trip, we look forward to the development of this scientific adventure that has the potential to revolutionize the quest for sustainability.
On our future visits to San Martín, I know the ideas discussed during these past few weeks will bear fruit. We will build on collaborations with government agencies and conduct two training workshops. By the end of this process, we hope to provide policy recommendations that will help Peru realize the true value of its natural wealth.
Ana Maria Rodriguez is the manager for agricultural development in CI’s Moore Center for Science and Oceans. Thanks to Percy Summers, Daniel Juhn, Hedley Grantham and Rosimeiry Portela for their contributions to this blog. EVA is intended to be a World Bank case study in the emerging field of “ecosystem accounting” — additional thanks to the World Bank Policy and Technical Expert Committee (PTEC) of the Wealth Accounting and Valuation of Ecosystem Services (WAVES) and the Gordon and Betty Moore Foundation for their generous support.