World Bank picks PH as pilot country for 'green accounting'

PAGADIAN CITY, ZAMBOANGA DEL SUR - The Philippines has been chosen along with four other pilot countries for the implementation of a World Bank-led partnership that helps nations incorporate the value of natural resources in the national accounts.

This was announced by Environment and Natural Resources Secretary Ramon J. P. Paje, who represented the country during a high-level ministerial meeting on natural capital accounting (NCA) or simply called "green accounting," organized by the international financial institution in Washington, D.C. last April 18.

Paje said the Philippines - together with Botswana, Colombia, Costa Rica and Madagascar - will serve as an implementing partner for the Wealth Accounting and Valuation of Ecosystem Services (WAVES) project of the World Bank.

WAVES is a global partnership that aims to promote sustainable development by ensuring that the national accounts used to measure and plan for economic growth include the value of natural resources.

According to Paje, the Philippines was selected as a pilot country for the WAVES program because it is one of the very few nations that have been conducting an accounting of natural resources as early as the 1990s.

“The country was noted for accounting for our natural resources such as minerals and forests to provide policy makers with accurate information that can help them make better decisions regarding development priorities and investments that are feasible and sustainable,” he explained.

The environment chief said his participation in the meeting was “very timely and relevant” given the thrust of the Aquino administration on environmental conservation using sound decision-making while pursuing “sustainable, inclusive and resilient growth.”

“It is very important for us to account for our natural wealth, to uphold the principle of intergenerational equity wherein we protect the interest of future generations by protecting our natural resources, especially those that are finite such as minerals,” he pointed out.

Paje cited Executive Order No. 79, which institutionalizes and reforms the mining industry, as a classic example of accounting for natural wealth for future development.

He said that while "increasing excise tax from mining companies makes sure that the state gets its rightful share from mineral resources, which are in fact part of the national patrimony, there is a need to account for the resulting increase in government revenues by investing them in certain long-term infrastructure and programs, such as education and research."

"This way, even though the non-renewable resources are extracted, future generations can still, though indirectly, enjoy them through improved goods and services and additional infrastructure," he added.

Meanwhile, Paje expressed optimism that with the WAVES partnership, the government would be able to better address conflicting issues on mining, biodiversity conservation, environmental protection and climate change.

The four-year project, which costs US$ 1.45 million, is expected to roll off by the second half of this year, with the National Economic Development Authority, National Statistical Coordination Board, and the Laguna Lake Development Authority as collaborating agencies.

WAVES was initially launched in October 2010 during the Conference of Parties to the Convention on Biological Diversity in Nagoya, Japan. The partnership was able to formulate and propose a program of international action on ecosystems accounting at the “Rio+20” Earth Summit held in June 2012.

The program of action was endorsed by 62 countries including the Philippines, 90 private sector entities, and 17 civil society and international organizations, which all committed to supporting NCA to move beyond gross national product (GDP) as the main measure of an economy’s progress.

The NCA is thought to be more accurate in determining economic growth and its sustainability, rather than relying on traditional economic indicators such as GDP.

With the GDP, for example, while income from mining or timber harvesting is recorded in national accounts, the simultaneous depletion of natural forest assets and mineral reserves are not recognized.

The GDP also fails to explicitly identify critical ecosystem services such as tourism, regulating water cycles, preventing erosion and flooding, and carbon sequestration, resulting in misleading economic signals about economic growth and development. (PR RPAO DENR-9)