Georgia leading the way on Natural Capital Valuation
The Economics of Ecosystems and Biodiversity (TEEB) aims to inform policy making by improving the national level evidence base for natural capital and help countries better account for natural assets in decision-making and policy formulation. Georgia is one of several countries putting the theory into practice.
Georgia, nestled among the soaring Caucasus Mountains belongs to one of 34 globally significant "biodiversity hotspots" identified by Conservation International. Georgia's ecosystem services serve as a powerful engine of economic growth in sectors such as agriculture, energy, tourism, mining, and forestry. For example, Georgia's agriculture sector employs 53 per cent of the workforce and is the main vehicle for rural development.
Georgia recognized the importance of its ecosystem services when it embraced The Economics of Ecosystems and Biodiversity (TEEB), partnering with UNEP and the WWF to carry out a scoping study that identified the dependence of these five key sectors on natural capital.
"Most of these services are considered free and, therefore, they are not seen or are undervalued in decision-making," said Khatuna Gogaladze, Georgia's Minister of Environment and Natural Resources Protection. "Unsustainable use of this capital, or investments aiming at short-term revenues, could cause significant loss and irreversible degradation of these natural resources, which in turn will definitely destroy the principles of sustainable development and prevent economic growth of the country in the long-term."
Ms. Gogaladze identified the main threats facing her country's ecosystems as destruction and degradation of habitats by infrastructure development, logging, degradation of water systems, pollution and overgrazing -in line with the findings of the TEEB study.
While Georgia's economy has enjoyed strong growth, posting a 6.2 per cent increase in Gross Domestic Product (GDP) in 2012 according to the National Statistics Office, the minister feels traditional growth indicators do not take the damage into account.
"By including the value of the environment into wealth estimates and macroeconomic indicators, such as GDP, governments can ensure that their development strategies deliver sustainable and inclusive growth," she added. While the scoping exercise was only intended to set the stage for a full study, Ms. Gogaladze said the results had been incorporated in the National Biodiversity Strategy and Action Plan of Georgia for 2014-2020.
It is in the interests of both developed and developing countries to start incorporating natural capital into their national development policies and national accounts to make enlightened policy decisions," she said. "We think that Georgia can be an example for other countries to engage in the TEEB process."
This article was originally posted by the UNEP News Centre, available here.
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