Download Presented - UNDP-UNEP Poverty

Malawi Poverty-Environment
Initiative
Economics Assessment/Valuation of
Environment and Natural Resources
Country Experience
Presented to the PEI Africa Regional Economic Forum
8-11 November 2010
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
Outline
1. PEI Program Objectives
2. Key Achievements related to Economic
Valuation of ENRM
3. Objectives and Methodology
4. Key Findings/Recommendations
5. Policy Impact
6. Challenges and Response
7. Lessons Learned
8. Next Steps
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
BACKGROUND
The UNDP-UNEP PEI supports Government to:
• Include environmental sustainability as a core objective in
national development planning (e.g. Malawi Growth and
Development Strategy) & implementation so that poverty
reduction and other economic development objectives are
not undermined by the unsustainable use of natural
resources.
• Build capacity so that decision-makers know:

How environmental sustainability contributes to
development; and

How to include environmental sustainability in
development planning & implementation.
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
KEY ACHIEVEMENTS
• Draft report presented to and approved by the
PEI Technical Committee
• Draft report presented to a national consultative
workshop
• Consultants currently incorporating comments
• Report yet to be presented to the Steering
Committee for vetting
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
KEY ACHIEVEMENTS
• The report has been used in drafting the
socioeconomic chapter for the Environmental
Outlook Report
• The draft report has already generated a lot of
debate in the media
Study Context
• About 80% of Malawians depend on
renewable natural resources for
subsistence and income
• Dependence on rain-fed agriculture
implies significant role of natural resources
• Sustainable management of key natural
resources is crucial
Study Context
• Attainment of MGDS targets could be threatened
by unsustainable use and degradation of natural
resources
• Hence “conservation of natural resource base” is
an MGDS sub-theme under Theme 1
• This buttresses Goal 7 of MDGs
• The MPEI complementing Government efforts
• The Economic Study seeks to support evidencebased policy-making and resource allocation
Objectives of the Economic Study
• Provide evidence on the costs and benefits
of natural resource management
• Examine the link between natural resource
management  poverty reduction, economic
well-being & development
• Assess net benefits of key interventions
that encourage sustainable natural resource
use
Study Design and General
Methodology
• Desk reviews and interviews
–
–
–
–
Characteristics
Significance
Threats/loss
Policies
• Case studies in 3 catchments
– Linthipe
– Lower Shire
– Middle Shire
 Visits
 Analyses of satellite images for 1994-2008
Key Findings
National GDP figures are understated:
NR Sector
Official
Statistics
Forestry
Fisheries
Wildlife
Total
1.8%
4.0%
5.8%
Additional
contribution
identified
4.3%
2.7%
7.0%
Total share
of GDP
Sources of new evidence
6.1%
4%
2.7%
12.8%
BEST (2009) – charcoal & firewood
WTTC (2009) – nature-based tourism
Malawi losing $191m (5.3%) of GDP annually!
NR sector & source of cost – base case
Soils:
On-site impact on agriculture
Off-site impact on hydropower
Off-site drinking water treatment
Forests:
Unsustainable roundwood (excl fuelwood)
Unsustainable fuelwood
Flood prevention (indicative only)
Indoor air pollution
Outdoor air pollution - WB 2002
Fisheries:
Unsustainable use (lower bound)
Wildlife:
Poaching loss (indicative only)
Total
Annual cost (2007 prices)
MK Million
US$ Million
8,988
7,540
1,433
15
12,983
3,100
6,089
232
3267
327
3,906
3,906
665
665
26,573
MPEI Economic Study Report #1
65
54
10
0
93
22
44
2
23
2
28
28
5
5
191
%
of
GDP
1.9%
1.6%
0.3%
0.0%
2.4%
0.4%
1.2%
0.2%
0.7%
0.2%
0.8%
0.8%
0.1%
0.1%
5.3%
Key Findings
• Malawi is losing significantly!
– 5.3% of GDP annually ($191m) at 2007 prices
– More than allocation to key ministries in 2009
• Education: $175.3 million
• Health: $163.6 million
– 28% of this ($54 million) is due to reduced yields
from soil loss
– $600m over 10 years @ 10% discount rate
• $200 per household
Key Findings
Adjusted Net Savings (ANS)
= green accounting rate of national wealth creation
= national saving + human capital formation – unrenewed
NR use
o WB estimate = 12.24% of GNI
o WB/Authors = 7.14% of GNI
o
Thus, environmental and natural resource degradation
implies that wealth is being created more slowly
o
At 4.87% of GNI, educational expenditure is outweighed
by natural resource degradation (5.1% of GNI)
Some implications: yield loss
o Recall: Yield loss due to soil degradation = $54m p.a.
o Conservatively, this reduces agricultural yields by 6%
o Other studies document higher losses
• 4-11% p.a. (WB, 1992)
• 8-25% p.a. (Bishop, 1995)
o Benin et al (2008) argue:
o 6% improvement in agricultural yields during 2005-2015,
would increase overall GDP growth from 3.2% to 4.8% p.a.
 proportion in poverty falling to 34.5% by 2015 i.e. the
incidence of poverty falls 12.5% resulting in 1.88 million
people being lifted above the poverty line by 2015
Some implications: Overall
• Benin et al (2008) consider GDP growth of 4.2%
p.a. above the baseline case.
– Over 2004 – 2015, the proportion in poverty would be
halved from its 1990 level – to 25.2%
– i.e. sustainable NR use could have enabled the
MDG1 target to be reached
• If the lost economic value from unsustainable
resource use each year across all ENRM sectors
(5.3% of GDP) is converted into economic growth,
the impact on poverty would be much larger
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
POLICY IMPACT
Policies likely to be affected/adjusted.
• Review of the Malawi Growth and
Development Strategy (MGDS)
• Review of the Policy Forestry 1996
• Budget Guidelines
• Public Environmental Expenditure Review
(PEER) in the offing
• Incorporation of ENRM into the Guide to
Executive Decision Making
• Fisheries and Aquaculture Management Act
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
CHALLENGES AND RESPONSE
• The study has taken unnecessarily long due to lack
of capacity to conduct such detailed analysis
• There is a temptation and interest by stakeholders
to cover all natural resource sectors. This can
make the study loose focus and unmanageable
• Hybridisation of local and international consultants
• Continuous negotiations and consultations with the
consultants
• Concise TORs and agreement by TC on the areas
to be covered
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
LESSONS LEARNED
• The consultative process requires heavy
investment and patience
• The need to involve all stakeholders especially
those that may challenge the results
• There is great interest to mobilise evidence for the
cost of sustainable use of natural resources in
Malawi
• The analysis should be quite instrumental in
convincing decision makers to invest in ENRM
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
NEXT STEPS
•
•
•
•
•
•
Vetting of the report by the Steering Committee
Capacity building for research institutions
Capacity building for Cabinet and Parliamentary
Committee
Capacity building for journalists
Advocacy using media and CSOs
Monitoring on the use of the report
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
NEXT STEPS
• Based on the results of the study, the PEI Country Team
is improving its work in order to help promote behavioral
change and improved plans, policies, budgets and
monitoring frameworks
• Involvement of different stakeholders to deliberate on the
report
• Inclusion of the academia on the use of the report
• Moving in to position issues of ENRM in all current
developments e.g. ASWAp, MGDS
• Using the report to lobby for incorporation of ENRM in
Government Policies and Planning including in Budgetary
frameworks
Government of Malawi
UNDP-UNEP Poverty- Environment Initiative
Thank you for listening
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ry_profiles/malawi.asp