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The economic value of the environment – a missing component in the MDGs?

The Millennium Development Goals (MDGs) provide targets for reducing the poverty of people living in the world’s poorest communities. However, it is unlikely that these targets will be met without increased investments to improve environmental management in ways that benefit poor people.

Ecosystems provide many resources; the health and well-being of all people depends on good management of the different components of the environment. This ensures a supply of clean water, clean air, food, fertile soils and access to forest products and other natural resources critical to people’s livelihoods. However, the market systems that represent these environmental services do not reflect this importance. This means the economic value of ecosystems is not fully recognised, leaving them susceptible to exploitation and degradation.

Environmental resources are especially important to poor people in rural areas, who depend on pastures, forests and water systems for income generation and their own food supply. Commercial exploitation by large companies and poor governance can lead to these environmental assets being exploited, degraded and destroyed. This further increases the marginalisation and poverty of poor people. Poor people are particularly vulnerable to natural environmental hazards, such as storms, floods and droughts, and human-induced threats, such as water and air pollution. A failure to protect the environment increases the likelihood and severity of such events.

Research from the Poverty-Environment Partnership (PEP) argues that to eliminate poverty, policymakers must give greater support to sustainable and more ‘pro-poor’ environmental management strategies, including greater recognition of the economic value of environmental services and higher investment in environmental programmes. The research shows:

  • Investments in climate change adaptation programmes are particularly important to help poor and vulnerable populations cope with the effects of environmental change.
  • Social and economic barriers, such as insecure rights of access to natural resources, reduce poor people’s capacity for sustainable environmental management.
  • Environmental investments, for example in soil conservation, sustainable energy and water supply and sanitation, can reduce poverty and protect the environment. They can also bring high financial returns, making them an attractive policy option.

However, greater investment is not enough. There needs to be a change in thinking about environmental management. It cannot be considered a separate issue to other development problems. Furthermore, policymakers must recognise that people living in poverty have a critical role to play in environmental management, rather than dismissing these communities as a cause of environmental degradation.

Policy lessons include:

  • A commitment to protect environmental assets must be integrated into all poverty reduction strategies.
  • Environmental factors should be considered at the beginning of planning strategies to ensure sufficient funding for these tasks.
  • Good governance is essential to ensure poor people can use and manage environmental assets. Environmental management activities must increase the participation and management power of rural communities and local governments. This includes secure property rights, effective anti-corruption measures and access to information.

Source(s):
‘Sustaining the environment to fight poverty and achieve the MDGs - the economic case and priorities for action - a message to the 2005 World Summit’, Poverty-Environment Partnership, 2005 Full document.
‘Investing in environmental wealth for poverty reduction’, Poverty-Environment Partnership, 2005

Funded by: Government of Denmark; Government of Sweden and Göteborg University; SNV Netherlands Development Organization; United Nations Development Programme; United Nations Environment Programme; WWF International

id21 Research Highlight: 6 March 2006

Further Information:
Peter Hazlewood
Poverty and Environment Initiative (PEI)
Energy and Environment Group
Bureau for Development Policy
United Nations Development Programme
304 East 45th Street, 9th floor
New York, NY 10017
USA

Tel: +1 212 906 6931
Fax: +1 212 906 6690
Contact the contributor: peter.hazelwood@undp.org

United Nations Development Programme

Joshua Bishop
IUCN – The World Conservation Union
Rue Mauverney 28
1196 Gland
Switzerland

Tel: +41 22 999 0266
Fax: +41 22 999 0020
Contact the contributor: joshua.bishop@iucn.org

IUCN – The World Conservation Union

Other related links:
'Monitoring the role of environmental management in the MDGs'

'Women and environmental conservation'

'Payments for environmental services: an alternative to traditional conservation approaches'

'Ecosystem conservation is the key to economic development'

'Linking conservation and sustainable livelihoods'

Views expressed on these pages are not necessarily those of DFID, IDS, id21 or other contributing institutions. Unless stated otherwise articles may be copied or quoted without restriction, provided id21 and originating author(s) and institution(s) are acknowledged.

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