When environment-related public spending is compared to the much-larger economic costs of environmental damage, governments tend to sit up and take notice – and invest more in sustainability.
Depending on the country, public expenditure ranges from 15-60 per cent of Gross Domestic Product (GDP). Generally, only a few per cent of this is directed towards environmental investments, even though the costs of a damaged environment often run into double figures.
Aligning a larger chunk public money with poverty-reduction and environmental objectives could be a game-changer, saving developing countries precious budgetary resources.
This is one of the lessons emerging from an analysis of the work of the Poverty-Environment Initiative (PEI), an initiative jointly developed by the UN Development Programme and UN Environment, over the past decade.
With programmes in 25 countries – nine of them in Africa – PEI has supported Member States to integrate pro-poor and environmentally sustainable objectives into national, subnational and sectoral development policies, plans and budgets to contribute to reducing poverty and creating a greener economy.
Huge pay-offs possible
Natural resources such as forests, soils and fisheries are being degraded at an unprecedented rate; all too often the costs of this degradation are not included in economic decision-making. Re-allocating government resources offers huge opportunities in terms of human well-being, and is a critical building block for implementing the 2030 Agenda for Sustainable Development.
For example, in Mozambique the average environmental expenditure for the period 2007-2010 was 1.4 per cent of GDP, while the economic valuation estimated that 9 per cent of GDP is required to recover the 17 per cent of GDP lost annually to environmental degradation and inefficient natural resource use. Similarly, in Mali environmental expenditure was estimated to be 1 per cent of GDP, despite the fact that the costs of inaction with regards to environmental sustainability amount to 21 per cent of GDP, negatively impacting the livelihoods of the poor.
These figures clearly show the return on investing in sustainable natural resource use is high, yet at present that benefit is not being fully captured.