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This event took place on November 05, 2021

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00:20 [Male voice]: How do you measure the wealth of a country?
00:24 For many, gross domestic product is the first and perhaps only measurement that comes to mind. GDP
00:31 measures the monetary value of the goods and services a country produces, but it doesn't
00:36 provide information on a country's wealth, or how sustainable development will be in the long-term.
00:43 To do that, we need to consider all of a country's assets, the ones used to produce those goods and
00:49 services in the first place. So what assets ought to be considered? Let's explore some of them.
00:56 First, the natural capital, like forests, agricultural lands, fisheries, and minerals. Also,
01:04 the human-made or produced capital, buildings, roads, machinery, and such. And of course,
01:11 the skills and experience of the population, a country's human capital. Taking stock of a
01:19 country's assets can help determine whether or not growth is sustainable. Exploiting natural
01:24 resources may look like economic growth today, but what about the future? Forest degradation,
01:31 air pollution, overfishing, and more deplete wealth and threaten future prosperity.
01:37 Overdependence on certain non-renewable resources, especially fossil fuels, also poses risks.
01:45 Steps to increase future prosperity are possible however. Protecting and investing in renewable
01:51 natural capital is imperative, particularly in the face of climate change. For example, consider how
01:58 storms are increasing in frequency and intensity, all while coastlines are further developed.
02:04 What can be done to protect these coastal assets? One innovative approach, replant mangroves,
02:11 a renewable natural resource. Mangroves are becoming even more valuable because of the
02:16 protection they offer coastlines. Investments in replanting and protecting mangroves,
02:21 especially where they are protecting other assets can safeguard future wealth.
02:26 Natural and produced capital aren't the only types of resources in need of protection though.
02:31 Did you know that in most countries, human capital represents the greatest fraction of wealth?
02:37 The global COVID-19 pandemic shows just how at risk human capital and livelihoods can be
02:42 and reinforce the need to address ongoing issues like gender gaps and the health impacts of air
02:48 pollution. The World Bank's Changing Wealth of Nations 2021 provides the most comprehensive
02:55 data to date with full accounts of wealth for 146 countries. Through wealth accounting, decision
03:02 makers can promote future economic viability and growth with policies that promote sustainable use
03:08 and diversification of assets. Look ahead to the future with an eye on climate change
03:14 and other risks and continually invest in a nation's greatest resource, its people.
03:21 [Elisabeth Mealey]:
03:27 Hello, and greetings from COP26 in Glasgow. I'm Elisabeth Mealey, Communications Manager
03:33 for Sustainable Development at the World Bank. I'm pleased to welcome you to today's event, The Value
03:39 of Nature to People and Planet. This is especially timely on the eve of Nature Day at COP here where
03:45 many of the major discussions will focus on the connections between the drivers of nature loss and
03:51 climate change. As you saw in our opening video, nature loss is an economic and development issue
03:58 that is very closely linked with climate change. Today's discussion looks at how we can better
04:03 account for the value of nature and what nature and climate smart development really look like.
04:08 [Elisabeth Mealey]: I'm joined today by Mr. Alfred Okot
04:12 Okidi. He's the Permanent Secretary for the Ministry of Water and Environment in Uganda.
04:17 Welcome. Mari Pangestu, World Bank Managing Director for Development Policy and Partnerships.
04:24 Welcome Mari. And Karin Kemper, World Bank Global Director for Environment,
04:28 Natural Resources and the Blue Economy. Welcome everyone, and thank you for joining.
04:33 [Elisabeth Mealey]: Karin, who's coming to us from Washington,
04:36 DC today will start with a presentation on recent analytical report work from the bank that makes
04:42 the case for the economic and development
04:46 value of investing in nature. Karin, welcome and over to you.
04:51 [Karin Kemper]:
04:54 Thank you, Elisabeth. It gives me a really great pleasure to welcome you all to the World Bank
05:02 COP26 high-level MDB Pavilion event, The Value of Nature for People and Planet. For the World Bank,
05:11 the biodiversity and climate crisis critical development issues, which are interlinked, and
05:18 sustainable use and degradation of ecosystems affect their ability to act as carbon sinks
05:26 undermining climate change mitigation efforts. Climate change in turn further threatens the
05:33 integrity and resilience of ecosystems and their key role in climate mitigation and adaptation.
05:40 And failure to address both crises will give rise to real material and systemic risks.
05:48 It's estimated that more than half of the world's gross domestic product is generated
05:55 in industries linked to nature and its services. So a combined approach that
06:00 enables nature and climate smart development is needed. And let's go to the first slide.
06:08 [Karin Kemper]: So to come to this approach, we need to
06:13 make an economic case for nature. It requires data on natural capital as well as tools to integrate
06:20 the cost of nature into policymaking, and we need to mobilize finance for nature. So we have worked
06:28 to contribute some of the analysis needed to weigh trade-offs and make sustainable and nature smart
06:34 development decisions through a series of recent World Bank flagship reports. So the Changing
06:40 Wealth of Nations 2021, where you just saw the video, produced the most comprehensive global
06:47 estimates of wealth and natural capital covering 146 countries from 1995 to 2018. This report
06:58 fills an important data gap because as you know, countries regularly track GDP as an indicator of
07:06 their economic progress, but they don't track wealth, the assets such as infrastructure,
07:12 forests, minerals, and human capitals that commit countries to produce the GDP in the first place.
07:19 [Karin Kemper]: So changes in GDP measure whether growth
07:24 is growing, but changes in wealth measure whether this growth is sustainable. So the Changing Wealth
07:31 of Nations report produces these wealth estimates using an internationally accepted methodology
07:38 that allows wealth estimates to be used by ministries of finance and other policymakers.
07:45 Now, there are limitations to this methodology when considering the
07:49 value of biodiversity and ecosystem services, and therefore our other flagship publication,
07:56 The Economic Case of Nature, estimated for the first time the economic costs of collapse in
08:03 key ecosystem services. And our approach paper, Unlocking Nature-Smart Development,
08:09 which came out in 2021, outlines global responses that could unlock nature-smart development.
08:17 [Karin Kemper]: So let me tell you a bit in the next slide
08:20 and the following slide what all of this means in practice. What are the results of these analysis?
08:27 So when we look at our latest findings on this global wealth, we see that also total wealth
08:34 increased everywhere per capita total wealth, which as a better measure of sustainability
08:40 did not. If resources, especially natural resources are depleted for short term gains,
08:47 countries may be on an unsustainable development path. And in fact, 26 countries across every
08:54 income group experienced a decline or stagnation in per capita wealth. The countries most at risk
09:02 include fragile conflict, resource-rich, and low income states. If the trend continues,
09:09 then future generations in these countries will be worse off than present generations.
09:15 [Karin Kemper]: Now, on the next
09:17 slide then, we can see that natural capital represented 6% of total global wealth in 1995
09:26 and in 2018 with a share equally divided between renewable and non-renewable natural capital.
09:33 However, the importance of renewable natural capital varies greatly with
09:40 income level. In particular, for low income countries, renewable natural capital remains
09:46 critically important and it accounts for about a quarter of their total wealth in 2018.
09:53 Nature has too often been invisible to national finance. The Changing Wealth of Nations report
10:00 sheds light on this issue by putting natural capital on the balance sheets of countries.
10:05 And this allows policymakers to proactively account for the assets now and to make policies
10:12 based on their wealth for the future. There are countries that are doing this already
10:18 as we will soon hear from the Permanent Secretary of the Ministry of Environment of Uganda.
10:24 [Karin Kemper]: On the next slide, you see
10:28 that our wealth accounting this time included for the first time mangroves and marine capture
10:35 fisheries, which are a major component of blue natural capital. The findings are concerning. The
10:43 value of blue natural capital fell by half from 1995 to 2018 as the value of capture fisheries
10:52 collapsed by 83%. So overfishing, subsidies and rising fishing costs have undermined marine
11:01 capture fisheries wealth. Meanwhile, the value of mangroves has risen 157%. And you may say, why has
11:09 it done that? Well, mangroves are valued for their coastal protection services, which are increasing
11:17 in value as coastlines are more developed and as climate change poses higher storm risks.
11:24 So this indicates to us the great economic value that nature-based solutions can have.
11:30 [Karin Kemper]:
11:32 The next slide shows you that there are limitations to our ability to value biodiversity
11:39 using this wealth accounting methodology for now, and how in fact we are addressing that
11:46 in order to think through how we can really measure biodiversities for other analytical
11:53 work at the World Bank. So earlier this year, we developed a first-of-its-kind integrated global
11:59 [inaudible 00:12:00] economy model to model the interaction between nature services and the global
12:06 economy. We studied the impact of changes in selected ecosystem services on the global economy
12:12 and vice versa between 2021 and looking forward to 2030. These services are pollination, provision of
12:22 timber and food from marine fisheries, and carbon sequestration by forests. Next slide please.
12:30 [Karin Kemper]: The analysis of
12:32 that reveals that the world cannot afford the collapse of ecosystem services. Even a partial
12:39 collapse would cost 2.3% of global GDP that makes it $2.7 trillion in 2030. The negative growth
12:50 impacts are highest for low-income countries, particularly in Sub-Saharan Africa and in South
12:57 Asia. And this does not even include the direct effects of climate change that run in parallel,
13:04 making these figures of very, very conservative estimate of losses.
13:09 [Karin Kemper]: Now, what policies can we put in place?
13:14 The next slide shows our policy simulations and it shows that there are already nature-smart policies
13:22 which can both reduce systemic risks and generate economic gains.
13:27 Examples considered in our report include domestic and global forest carbon payments,
13:33 shifting agricultural subsidy incentives, and increasing agricultural research and development.
13:40 And we see that ambitious targets, including the 30 by 30 target are within reach,
13:46 particularly when synergies with climate change are exploited. This would require an effective
13:54 global and country level response which builds on a whole-of-economy approach that addresses the
14:00 drivers of biodiversity and economy and ecosystem loss across the economy, a solid science and
14:08 the economic base for action, and measures to support an equitable and inclusive transition.
14:15 [Karin Kemper]: So once these building blocks are in place,
14:18 nature-smart development could be unlocked through six global response areas. You can see them on the
14:24 right hand side of the slide. I'm not going to go through all of them, but you can see that it is
14:31 both on the economic side, but also on the people side working with people and through communities
14:40 and of course, mobilizing finance and leveraging partnerships.
14:45 This in our report, it is quite developed if you are interested to look at that.
14:51 [Karin Kemper]: And then coming to the final slide,
14:55 what is needed going forward? And of course, one of the big discussions is about mobilizing finance
15:02 and public policy will only be truly effective if we can leverage the necessary resources
15:10 to support nature-smart development. In order to adequately scale nature and climate action to meet
15:17 today's challenges, mobilizing finance is really key because delaying investments on
15:24 nature and climate could actually trigger a vicious cycle where climate shocks and the
15:29 collapse of ecosystem services impact economies further, making it impossible to address the
15:36 consequences of climate change and nature loss that we are already experiencing. It's
15:43 therefore necessary to create the adequate and affordable finance flow to developing countries,
15:51 removing key obstacles that stand in the way on both the demand
15:55 and on the supply side. And the private sector there has a really key role to play.
16:02 [Karin Kemper]: To mobilize sufficient
16:04 private finance, a two-pronged approach is necessary. One that finances green activities
16:11 that promote and enhance the ecosystem services that nature provide, but also ones that greens
16:18 finance and that greens financial markets. That will involve directing financial flows away from
16:25 projects with negative impact on biodiversity on ecosystems, but it also means to incentivize
16:33 achievement of sustainability objectives. For example, encouraging the adoption of green bonds,
16:40 the further issuing of green bonds, and ensuring that the scoring of sovereign bonds
16:45 ensures that the state of the environment and its economic value are taken into account.
16:51 [Karin Kemper]: So with that,
16:53 I want to thank you. It's been an honor to share our work with you today. And now
16:58 I'm looking forward to the discussion on how these important analysis can be put into action
17:04 with our distinguished guests joining us in Glasgow. Over to you, Elisabeth.
17:09 [Elisabeth Mealey]: Thank you, Karin.
17:11 Very interesting presentation there and some startling figures, including $2.7 trillion
17:18 in potential losses to economies if we lose some of these incredibly important ecosystem services
17:24 that nature provides. Let me turn to our guests, Mr. Okidi, who's the Permanent Secretary
17:32 for the Ministry of Water and Environment in Uganda. I understand you've been working on
17:40 understanding the value of nature to Uganda's economy and even factoring nature into your
17:47 planning and development planning. Can you just talk us through what Uganda has been doing and
17:54 how you're figuring nature more squarely in your economic planning?
18:00 [Alfred Okot Okidi]: Thank you. Uganda's development,
18:06 that is captured in Vision 2040, and the National Development Plan III is actually nature-led.
18:16 And we realize as a country that there's a big disconnect in terms of understanding
18:28 to what extent the natural capital of Uganda is actually contributing and driving
18:37 the development of the country. And therefore, what we opted for with support of the World Bank
18:45 is opted to get into natural capital accounting because if you know what you're measuring,
18:51 then you can manage it. Because the biggest concern for us as a country right now is the
18:59 amount of degradation and the losses in some of the ecosystems. And yet when you look at the basic
19:10 figures like the foreign earnings, for example, tourism is actually I think the number two foreign
19:16 exchange earner before the COVID pandemic came in. It was actually projected to be the number one.
19:22 [Alfred Okot Okidi]: So it is very important
19:24 for us as a country that these natural resources basis
19:28 are actually understood and then we protect them. So it has led to now at the development level,
19:39 highest development level, the country adopting the national capital accounting. It has also
19:44 driven the government to come up with a decade of restoration which was launched just about
19:52 two months ago after being passed by cabinet to see how we can restore all these ecosystems that
19:59 are critical to ensure that future generations also benefit from these nature-given resources.
20:11 The reason why we want these natural capital accounting really in is because we need to
20:20 understand and value because if we value, then we can treasure what roles it plays.
20:26 [Elisabeth Mealey]: I'll come back to this
20:30 a little more in detail, but first I want to turn to Mari Pangestu, our managing director,
20:37 to talk about how the World Bank has been working on this for quite a long time. It's
20:43 really been over 10 years that natural capital accounting has been a key priority for the World
20:49 Bank and supporting countries like Uganda to do it. How do you see this work contributing
20:54 to the broader mission of the bank on poverty reduction and promoting shared prosperity, Mari?
20:59 [Mari Pangestu]: Yes. Thank you for the question, Elisabeth.
21:03 I think we can start by where the permanent secretary left off. Mother nature doesn't need us,
21:10 but we need mother nature because it provides the ecosystem services that allows us to breathe,
21:17 to eat, and to live. And the loss of nature
21:23 and it's critical ecosystem services hurt the poor the most. That's why it's a development
21:29 imperative for us to address it. Karin mentioned some of the numbers and it comes from the three
21:39 major reports that Karin mentioned, including the one that we are talking about today,
21:43 which is the Changing Wealth of Nations. Just to add to Karin's numbers, 3 billion people depend on
21:49 marine and coastal biodiversity for protein intake and livelihoods. 75% of food crops
21:56 rely on animal pollination. And the poorest rural areas get income from forest resources
22:02 more so than agriculture. And so they will suffer the most from the depletion of forests.
22:08 [Mari Pangestu]: And the collapse of ecosystem services,
22:11 Karin mentioned the 2.7 trillion number. If you translate that into loss of GDP, it's 10% lower
22:19 GDP for Sub-Saharan Africa and 7% loss of GDP in South Asia by 2030. So this is all the loss of
22:30 nature and ecosystem services also impacts on climate change as Karin mentioned. And that
22:35 will have a double impact on poverty because business as usual scenario is leading us to
22:42 an estimate of 130 million more people which will enter into extreme poverty. So we need to address
22:49 and reverse the decline in natural capital. And to do so, as the permanent secretary mentioned,
22:56 we need to put a value to nature. We need to measure the value of nature going beyond GDP
23:04 and provide the economic argument for protecting nature, conserving nature, and restoring nature.
23:13 [Mari Pangestu]: And this is key to internalize
23:16 the value of nature in markets and government policy. So natural capital accounting is one tool
23:24 and the data and the analysis that's coming out of the Changing Wealth of Nations
23:28 is addressing this very important data gap for policymakers to help them guide
23:36 to have more nature and climate-smart policies that will... I think it's very important to
23:43 emphasize because we are making the economic case for development as to why you need to
23:50 protect nature and ecosystem services and it's linked to climate. It's about conservation, it
23:56 is about restoration in some instances, but it's also about the use of the natural assets that you
24:03 have in a sustainable way, right? It's not about just conservation because a lot of times there is
24:09 kind of a pushback because, oh, conservation. Then where do the livelihoods go? But you can do all
24:17 three, conserve, restore, and sustainable use of the resources like tourism as was mentioned by the
24:26 permanent secretary. And it creates a lot of value if you can measure it and then you can manage it.
24:33 [Elisabeth Mealey]: It's a line we've heard before,
24:35 but it's certainly true when it comes down to protecting what matters most. So thanks Mari.
24:43 Mr. Okidi, you did mention there that nature is a key part of your tourism, what's attracting people
24:52 to Uganda and it's therefore becoming a huge driver of economic growth in your country.
24:59 Can you tell us more about some of the drivers of nature loss?
25:02 You have a massive forest resource in Uganda. What's driving this degradation and how is
25:10 something like natural capital accounting that we've heard about today helping make a difference?
25:15 [Alfred Okot Okidi]:
25:17 Okay. There are primarily about four drivers of degradation in Uganda. The first one is poverty.
25:29 People go to look for livelihood and resources to survive
25:34 in these forests because of the poverty level. The second one is because of the rapid growth in
25:43 population and the demand for agricultural land. And given that our agriculture is nature-based,
25:50 you find that people are moving into the forest, the swamps, and even the slopes of the mountainous
25:59 areas that are quite dangerous to do cultivation. So the drive is for agriculture. And then
26:07 nearly 95% of the population of Uganda still depend on the energy sources for cooking
26:16 on biomass. That is charcoal, firewood. So the venture, especially into the forest
26:25 to look for that energy for cooking. We have also witnessed opportunities traders,
26:34 especially from without Uganda who have gone after very exotic species and rare species
26:41 and they have been actually harvesting them like the [inaudible 00:26:45] africana and the shea nut
26:49 tree with disastrous consequences. So these are the four primary drivers of degradation in Uganda.
26:59 [Elisabeth Mealey]: So in a way you have to attack multiple problems
27:05 in a whole development plan taking on all of these drivers at once.
27:09 How do you go about doing that? Your new Vision 2040 is interesting from that point of view.
27:16 [Alfred Okot Okidi]: The solution lies in actually addressing
27:19 these drivers in an integrated and holistic way. And one of the things that Vision 2040
27:28 tries to is actually transform the country into middle income by 2040. And to do that,
27:35 we need to move the agricultural practices from the peasantry type into commercial,
27:42 which is matte. And therefore, it implies using less or the same amount of land,
27:50 but producing more. So the issue of technology comes into place, the issue of water storage
27:57 so that people can cultivate the same piece of land maybe three or four times in a year and end
28:04 up earning six to 10 times what they're earning right now. So that is one of the solutions.
28:10 [Alfred Okot Okidi]: The other solution is to look at
28:14 shifting the energy usage from biomass. And in this regard,
28:22 it is a gradual transition looking at energy-efficient solutions like the
28:27 energy-efficient cooking stoves, but also encouraging people not to go to the natural
28:36 forest or the natural trees for biomass, but instead plant the fast maturing species
28:44 that they can use because some of them within a period of one and a half to two and half years,
28:48 they're already ready. So that is a drive for now as we transition into cleaner energy sources.
28:58 [Alfred Okot Okidi]: On the other side, enforcement
29:02 is being strengthened and we are also coming up with more robust legal protection because
29:08 some of the laws at the moment we realize actually do not give commensurate punishment if
29:16 you compare with the value of the resources that is being laid to waste. Because somebody destroys
29:24 exotic species worth maybe 200 million shillings, but he pays a fine of just about
29:31 80,000 shillings. So there's a disconnect. So we want to address that. But the principle is let
29:40 the population coexist with nature. So it is something like the MD said, really making
29:49 sure that you don't ban people, but make them co-exist peacefully and in a sustainable way.
29:55 [Elisabeth Mealey]: So it's this value on nature that we're
29:58 talking about today that has a benefit for people. So it's bringing that value to that awareness.
30:04 Mari, given what we've heard here today on the importance of natural capital for development,
30:10 how is the bank as a big institution working with countries actually making a difference? And
30:16 what are we actually doing to support this effort to put a value on natural capital?
30:22 [Mari Pangestu]: I think we are doing quite a lot globally and
30:26 at the country level because we see the critical link between nature, climate, and development.
30:34 And we need to invest in both nature and climate. So globally, we have the data and analytical work
30:41 that was described and presented by Karin. Today we talked about the Wealth of Nation's report.
30:48 Karin also mentioned other reports, but the data and analytics are key to be able to guide
30:55 policymakers so that they can make the informed decisions that will lead you to, I like the way
31:02 permanent secretary put it, so that nature and people can coexist in a sustainable way. So you
31:07 want both, right? You want the development, but you also want to protect the value of nature.
31:13 [Mari Pangestu]: And at the national level,
31:16 we are helping governments with the data and analytics to calculate the trade-offs
31:24 and figure out what types of policies you can achieve both. So once you identify the drivers of
31:31 the natural resource depletion, you can't just say, let's stop it. You need to find
31:36 an alternative. People's livelihoods are at stake, so you have to provide an alternative. Like in the
31:42 case of many of the forest fires, for instance, in Indonesia, it's traditional slash and burn
31:48 agriculture. And if you're not providing them alternative ways to do their agriculture in a
31:54 sustainable way, they'll still continue to do it, right? No matter how much enforcement you do. So
32:00 you do need to provide the kind of policies in an integrated way and provide the incentives as well
32:07 as the disincentives like the enforcement and the fines that was just mentioned.
32:11 [Mari Pangestu]: So I think we need to really
32:15 link efficient management of natural capital in a country with also the development outcomes. And in
32:23 our new Climate Change Action Plan with commitment for 35% of our financing going to climate
32:31 action, we are including nature-based solutions in all aspects, territorial,
32:39 coastal, marine, and mobilizing additional resources for nature and climate building on
32:46 our long history of working on biodiversity. And in particular for IDA20 because earlier,
32:53 we mentioned that the decline in natural capital and ecosystem services hit the poorest countries
33:00 the most and hit the poorest in these countries even more. So in the IDA20 replenishment,
33:06 we are very much focusing on the synergy between nature, climate, and development.
33:11 [Mari Pangestu]: Just a few examples. In India,
33:13 we are doing integrated coastal zone management restoring 19,500 hectares of mangrove
33:21 and investing in pollution management. In the lower Mekong region, which is the third largest
33:28 area for tropical forest, we are doing sustainable forest to scale. And another example, basically
33:37 last year we did 116 million hectares of marine and coastal protected areas, 10 million hectares
33:45 of terrestrial protected areas, and over 300 protected habitats, biological buffer zones,
33:52 and resources. So this is just examples of just how much work we can do and that we should do.
33:59 [Mari Pangestu]: And Karin and permanent secretary
34:03 also mentioned to do that you need financing, right? So how do we expand financing beyond
34:11 our commitment for 35% of our financing going for climate, including nature-based solution?
34:18 I think we were the first institution actually to issue a global green bond in 2008 catalyzing
34:27 sustainable investment in capital markets. So I think countries sovereign such as Uganda
34:32 have the potential to issue green and blue bonds, sukuk, green sukuk bonds. These are all
34:39 instruments that countries have actually issued to raise funds for this. And then there's the
34:46 public-private partnership with blended finance solutions where again, conservation
34:53 with other nature-based activities that is about conservation, restoration,
34:57 and livelihoods. I think we need to keep our focus on that and help countries develop such policies.
35:06 [Elisabeth Mealey]: Well, thank you.
35:08 You make the connection there between nature and climate, which is good because we are at a climate
35:12 COP. Mr. Okidi, here in Glasgow, how is what your country doing being noticed in terms of climate,
35:23 the importance of keeping Uganda's forests intact to addressing climate change. How
35:32 is that connection being made? And then as Mari raised, the need for finance. Are some of these
35:39 innovative financing tools like green bonds interesting to Uganda potentially going forward?
35:45 [Alfred Okot Okidi]: Okay. Thank you.
35:50 We have signed onto stopping deforestation and as a country, we're one of the signatories already.
36:03 We are on the taskforce for long-term financing. We are actually one of
36:10 the pioneers that are going to actually pilot it globally on behalf of the LDCs,
36:20 but also on the side of adaptive resilience, we are also one of the seven LDCs that are actually
36:30 chosen. And we have started the implementation of that so that what we do in terms of adaptation and
36:39 at the same time, conserving the environment, we can share with colleagues in the least
36:43 developing countries. So we had quite a lot of interaction and a lot is happening. And
36:51 the proposal, the promise of 100 billion I think is welcome. And from the various fronts,
36:58 we see a lot of proposals coming in and we wait for the implementation to make sure that the
37:06 100 billion comes on board. And our emphasis is that it should go a lot more towards adaptation.
37:12 [Alfred Okot Okidi]: Now, coming to financing, yes,
37:19 the talk in the past has been between government to government to look for funding
37:25 to address climate change, but it is pretty obvious that we need to look at solutions beyond
37:34 the government or the regional blocks, or even from the multi-national government banks
37:41 to address this problem. And
37:47 coming up with blended financing I think is one which I think Uganda has already done it with
37:54 the World Bank because we have a project that I think we've just launched. And it is actually
38:00 investment in forest and protected areas. And we have loan from the World Bank, we have grant that
38:08 is coming from the GCF that has been blended. And the quantum of the money has grown to the
38:15 extent that we believe it is a kind of arraignment that can help us address issues of climate change.
38:22 [Alfred Okot Okidi]: The same with the private sector.
38:27 In Uganda, we have already started and we have actually a framework where we are bringing
38:32 on board the private sector, and they've made voluntary undertakings using their own resources
38:39 and they're committed to every year for the next five years, planting at least 75 million trees.
38:46 And two of the breweries who anyway use the water resources from the swamps and the forest
38:54 [inaudible 00:38:55] have come up and they're very active in this particular program and they're
38:58 also involved in the restoration of swamps and protection of some of two rivers in the country,
39:05 which is actually a very good development. What I noticed is that the gap between the
39:13 public sector and the private sector on issues to do with climate change is too wide and it
39:18 needs to be brought up so that the private sector understands why they need to get involved in this
39:24 and why they need to commit resources because it is their sustainability that is at stake.
39:29 [Elisabeth Mealey]: Very interesting and a
39:31 very big theme here in COP this week and probably into next week as well.
39:37 How do we get the policies right so that the investment flows? So
39:42 all part of the same conversation around wealth accounting. Let me bring this to a conclusion
39:48 with you, Mari, on the other COP that is important to us all as well, the UN Biodiversity COP coming.
39:58 It was recently kicked off in Kunming, China, but that will be playing out during 2022. What
40:07 do you see as the connection between these two COPs, COP15, CBD, and COP26, 27 coming forward?
40:14 [Mari Pangestu]: They are intricately
40:18 linked because they're interrelated crisis. The biodiversity loss and the climate change
40:25 crisis are interrelated, as we have been discussing. And as I was walking to have this
40:32 session, I passed a sign which said on one side, nature is climate. And then on the other side,
40:38 climate is nature. So it's two sides of the same coin. And climate change leads to ecosystem losses
40:46 and you need healthy ecosystem services to play a role in mitigation, adaptation,
40:52 and resilience. We need healthy forests, wetlands, oceans, grasslands, to serve as carbon sinks
41:00 to mitigate. And it is also a source of economic value as was just mentioned.
41:08 These sinks, carbon sinks, it's a lot of talk about it here in this COP.
41:13 How can you get carbon credit and offsets for that to be able to finance that effort?
41:20 [Mari Pangestu]: So I think climate change and ecosystem
41:24 services protection is very key again, because we know the impact... If we don't do that,
41:30 the impact on development and the poorest. If we didn't do anything business as usual scenario,
41:37 it will really hurt the poor the most. So we need transformative and coordinated actions on both
41:44 natural and ecosystem services losses and the climate crisis. We need to manage both crises
41:50 in an integrated and interrelated way. And in fact, our estimate is showing that nature-based
41:57 solutions can provide 37% of cost-effective climate mitigation
42:05 efforts till 2030. So that's quite a huge proportion or contribution to climate mitigation.
42:13 [Mari Pangestu]: And we've been mentioning mangrove. So
42:17 let me give you an example from my own country, Indonesia. World Bank is helping Indonesia to
42:23 do mangrove restoration. I think it's 600 million hectares over the next five years. And it has
42:33 a triple benefit because it's part of the green fiscal stimulus program of Indonesia right now. So
42:41 you create cash for work for the communities that live around there and benefit from that coastal
42:48 area to do the restoration. So they're getting cash for work as the economy hasn't picked up.
42:55 And then once the restoration happens, they will have improved livelihoods from the restored
43:01 mangrove and the coastal area that becomes more healthy and so on. So you have a triple benefit
43:08 of livelihoods, income, and then the climate benefit and then of course protecting the
43:17 ecosystem services benefit. And it's not just livelihood today, but livelihood in the future,
43:24 right? So I think that's really the value of nature capital that we really need to protect.
43:31 [Mari Pangestu]: So just to close on the financing gap that was
43:36 mentioned, totally agree. It can't just come from public funding. The financing gap is $700 billion
43:44 per year on average till 2030. So we really need an integrated nature and climate
43:53 approach and a link between the biodiversity framework that's going to emerge from Kunming
44:02 post-2020 and the Paris Agreement. This is the work for us ahead.
44:09 And with that and government policies and the value of nature being more measured and managed
44:16 and clearly monitored, I think you can draw in private sector funding as we had just discussed.
44:23 [Mari Pangestu]: We really need all that to come together
44:26 in an integrated way, whole of economy approach and really clearly measuring the value that you
44:33 are protecting and monitor the actions that go with protecting and conserving and utilizing
44:45 the value of nature. And that's the only way that you'll be able to draw in blended finance.
44:52 That was an interesting example with the brewery and the forest. I think we can find
44:56 many examples where the private sector is actually benefiting from the protection of
45:03 the nature. They can also come in to co-invest not just government in protecting the nature.
45:10 [Mari Pangestu]: I have a similar example in Indonesia
45:13 in an area which grows rubber and it's below the conservation... It's in a conservation forest
45:19 area. So it's a sustainable rubber plantation, but they pay for the buffer around them because it's
45:29 right below a conservation forest and it's also the migration path for the wild animals. So they
45:37 protect the buffer because it's in their interest because they're doing the sustainable rubber
45:41 plantation there. And it was a blended finance. It was funded by blended finance, no government
45:47 involved, with bank that came in and USAID came in with a guarantee and impact investors coming in as
45:57 well. So it can be done, put it that way. Yeah, you just got to be able to structure it right.
46:02 [Elisabeth Mealey]: That is the message. It can be
46:04 done. We have the economic analysis that Karin has outlined. It's clear there's a value that
46:11 needs to be protected and built upon. And there's a huge link to climate. So I think that's the sort
46:18 of great summary of this conversation. I want to thank you all. Mr. Okidi from Uganda, thank
46:24 you for joining us. Mari Pangestu, our managing director at the World Bank, and Karin Kemper in
46:29 Washington, thank you so much for this excellent presentation. That brings us to our conclusion.
46:34 Thank you all for joining and a fantastic prelude to Nature Day tomorrow here at COP. Thanks.

The Value of Nature to People and Planet

Follow the event on Twitter #ClimateActionWBG

The nature loss and climate change crises are two sides of the same coin: the two are intrinsically linked and reinforce each other. Climate change is one of the main drivers of biodiversity and ecosystems services loss as, even under a 1.5-2°C global warming scenario, biodiversity is expected to be hard hit (IPBES, 2019). Conversely, the loss of nature contributes to climate change. The World Bank’s flagship analytical work, including The Changing Wealth of Nations 2021, The Economic Case for Nature (2021), and the approach paper Unlocking Nature-Smart Development (2021) highlight some of the future risks posed by climate change and nature loss, and underscore the importance of investing in nature.

The event will discuss how nature loss is an economic and development issue, and how it is linked to climate change, as well as pathways to undertake both nature and climate-smart development in the future, including through expanding our economic toolkit beyond GDP to account for the wealth provided by nature.

See the list of speakers ˅

00:00 Welcome! COP26: The Value of Nature to People and Planet
04:55 World Bank’s analytical work valuing natural capital
17:27 Nature and economic planning in Uganda
20:33 Natural capital as a key priority for the World Bank
24:43 Drivers of nature loss in Uganda
30:04 World Bank's efforts in putting a value on natural capital
35:14 Protecting Uganda's forests / Innovative financing tools
39:48 The connection with the UN Biodiversity COP
46:03 Closing remarks

Learn more

Speakers

Karin Kemper

Global Director, Environment, Natural Resources and Blue Economy Global Practice, Environment
@kkemperwb
Mari Pangestu

Former World Bank Managing Director of Development Policy and Partnerships
@Mari_Pangestu
Alfred Okot Okidi

Permanent Secretary, Ministry of Water and Environment, Uganda

Moderator

Elisabeth Mealey

Communications Manager for Sustainable Development, World Bank

Read the transcript

00:20 [Male voice]: How do you measure the wealth of a country?
00:24 For many, gross domestic product is the first and perhaps only measurement that comes to mind. GDP
00:31 measures the monetary value of the goods and services a country produces, but it doesn't
00:36 provide information on a country's wealth, or how sustainable development will be in the long-term.
00:43 To do that, we need to consider all of a country's assets, the ones used to produce those goods and
00:49 services in the first place. So what assets ought to be considered? Let's explore some of them.
00:56 First, the natural capital, like forests, agricultural lands, fisheries, and minerals. Also,
01:04 the human-made or produced capital, buildings, roads, machinery, and such. And of course,
01:11 the skills and experience of the population, a country's human capital. Taking stock of a
01:19 country's assets can help determine whether or not growth is sustainable. Exploiting natural
01:24 resources may look like economic growth today, but what about the future? Forest degradation,
01:31 air pollution, overfishing, and more deplete wealth and threaten future prosperity.
01:37 Overdependence on certain non-renewable resources, especially fossil fuels, also poses risks.
01:45 Steps to increase future prosperity are possible however. Protecting and investing in renewable
01:51 natural capital is imperative, particularly in the face of climate change. For example, consider how
01:58 storms are increasing in frequency and intensity, all while coastlines are further developed.
02:04 What can be done to protect these coastal assets? One innovative approach, replant mangroves,
02:11 a renewable natural resource. Mangroves are becoming even more valuable because of the
02:16 protection they offer coastlines. Investments in replanting and protecting mangroves,
02:21 especially where they are protecting other assets can safeguard future wealth.
02:26 Natural and produced capital aren't the only types of resources in need of protection though.
02:31 Did you know that in most countries, human capital represents the greatest fraction of wealth?
02:37 The global COVID-19 pandemic shows just how at risk human capital and livelihoods can be
02:42 and reinforce the need to address ongoing issues like gender gaps and the health impacts of air
02:48 pollution. The World Bank's Changing Wealth of Nations 2021 provides the most comprehensive
02:55 data to date with full accounts of wealth for 146 countries. Through wealth accounting, decision
03:02 makers can promote future economic viability and growth with policies that promote sustainable use
03:08 and diversification of assets. Look ahead to the future with an eye on climate change
03:14 and other risks and continually invest in a nation's greatest resource, its people.
03:21 [Elisabeth Mealey]:
03:27 Hello, and greetings from COP26 in Glasgow. I'm Elisabeth Mealey, Communications Manager
03:33 for Sustainable Development at the World Bank. I'm pleased to welcome you to today's event, The Value
03:39 of Nature to People and Planet. This is especially timely on the eve of Nature Day at COP here where
03:45 many of the major discussions will focus on the connections between the drivers of nature loss and
03:51 climate change. As you saw in our opening video, nature loss is an economic and development issue
03:58 that is very closely linked with climate change. Today's discussion looks at how we can better
04:03 account for the value of nature and what nature and climate smart development really look like.
04:08 [Elisabeth Mealey]: I'm joined today by Mr. Alfred Okot
04:12 Okidi. He's the Permanent Secretary for the Ministry of Water and Environment in Uganda.
04:17 Welcome. Mari Pangestu, World Bank Managing Director for Development Policy and Partnerships.
04:24 Welcome Mari. And Karin Kemper, World Bank Global Director for Environment,
04:28 Natural Resources and the Blue Economy. Welcome everyone, and thank you for joining.
04:33 [Elisabeth Mealey]: Karin, who's coming to us from Washington,
04:36 DC today will start with a presentation on recent analytical report work from the bank that makes
04:42 the case for the economic and development
04:46 value of investing in nature. Karin, welcome and over to you.
04:51 [Karin Kemper]:
04:54 Thank you, Elisabeth. It gives me a really great pleasure to welcome you all to the World Bank
05:02 COP26 high-level MDB Pavilion event, The Value of Nature for People and Planet. For the World Bank,
05:11 the biodiversity and climate crisis critical development issues, which are interlinked, and
05:18 sustainable use and degradation of ecosystems affect their ability to act as carbon sinks
05:26 undermining climate change mitigation efforts. Climate change in turn further threatens the
05:33 integrity and resilience of ecosystems and their key role in climate mitigation and adaptation.
05:40 And failure to address both crises will give rise to real material and systemic risks.
05:48 It's estimated that more than half of the world's gross domestic product is generated
05:55 in industries linked to nature and its services. So a combined approach that
06:00 enables nature and climate smart development is needed. And let's go to the first slide.
06:08 [Karin Kemper]: So to come to this approach, we need to
06:13 make an economic case for nature. It requires data on natural capital as well as tools to integrate
06:20 the cost of nature into policymaking, and we need to mobilize finance for nature. So we have worked
06:28 to contribute some of the analysis needed to weigh trade-offs and make sustainable and nature smart
06:34 development decisions through a series of recent World Bank flagship reports. So the Changing
06:40 Wealth of Nations 2021, where you just saw the video, produced the most comprehensive global
06:47 estimates of wealth and natural capital covering 146 countries from 1995 to 2018. This report
06:58 fills an important data gap because as you know, countries regularly track GDP as an indicator of
07:06 their economic progress, but they don't track wealth, the assets such as infrastructure,
07:12 forests, minerals, and human capitals that commit countries to produce the GDP in the first place.
07:19 [Karin Kemper]: So changes in GDP measure whether growth
07:24 is growing, but changes in wealth measure whether this growth is sustainable. So the Changing Wealth
07:31 of Nations report produces these wealth estimates using an internationally accepted methodology
07:38 that allows wealth estimates to be used by ministries of finance and other policymakers.
07:45 Now, there are limitations to this methodology when considering the
07:49 value of biodiversity and ecosystem services, and therefore our other flagship publication,
07:56 The Economic Case of Nature, estimated for the first time the economic costs of collapse in
08:03 key ecosystem services. And our approach paper, Unlocking Nature-Smart Development,
08:09 which came out in 2021, outlines global responses that could unlock nature-smart development.
08:17 [Karin Kemper]: So let me tell you a bit in the next slide
08:20 and the following slide what all of this means in practice. What are the results of these analysis?
08:27 So when we look at our latest findings on this global wealth, we see that also total wealth
08:34 increased everywhere per capita total wealth, which as a better measure of sustainability
08:40 did not. If resources, especially natural resources are depleted for short term gains,
08:47 countries may be on an unsustainable development path. And in fact, 26 countries across every
08:54 income group experienced a decline or stagnation in per capita wealth. The countries most at risk
09:02 include fragile conflict, resource-rich, and low income states. If the trend continues,
09:09 then future generations in these countries will be worse off than present generations.
09:15 [Karin Kemper]: Now, on the next
09:17 slide then, we can see that natural capital represented 6% of total global wealth in 1995
09:26 and in 2018 with a share equally divided between renewable and non-renewable natural capital.
09:33 However, the importance of renewable natural capital varies greatly with
09:40 income level. In particular, for low income countries, renewable natural capital remains
09:46 critically important and it accounts for about a quarter of their total wealth in 2018.
09:53 Nature has too often been invisible to national finance. The Changing Wealth of Nations report
10:00 sheds light on this issue by putting natural capital on the balance sheets of countries.
10:05 And this allows policymakers to proactively account for the assets now and to make policies
10:12 based on their wealth for the future. There are countries that are doing this already
10:18 as we will soon hear from the Permanent Secretary of the Ministry of Environment of Uganda.
10:24 [Karin Kemper]: On the next slide, you see
10:28 that our wealth accounting this time included for the first time mangroves and marine capture
10:35 fisheries, which are a major component of blue natural capital. The findings are concerning. The
10:43 value of blue natural capital fell by half from 1995 to 2018 as the value of capture fisheries
10:52 collapsed by 83%. So overfishing, subsidies and rising fishing costs have undermined marine
11:01 capture fisheries wealth. Meanwhile, the value of mangroves has risen 157%. And you may say, why has
11:09 it done that? Well, mangroves are valued for their coastal protection services, which are increasing
11:17 in value as coastlines are more developed and as climate change poses higher storm risks.
11:24 So this indicates to us the great economic value that nature-based solutions can have.
11:30 [Karin Kemper]:
11:32 The next slide shows you that there are limitations to our ability to value biodiversity
11:39 using this wealth accounting methodology for now, and how in fact we are addressing that
11:46 in order to think through how we can really measure biodiversities for other analytical
11:53 work at the World Bank. So earlier this year, we developed a first-of-its-kind integrated global
11:59 [inaudible 00:12:00] economy model to model the interaction between nature services and the global
12:06 economy. We studied the impact of changes in selected ecosystem services on the global economy
12:12 and vice versa between 2021 and looking forward to 2030. These services are pollination, provision of
12:22 timber and food from marine fisheries, and carbon sequestration by forests. Next slide please.
12:30 [Karin Kemper]: The analysis of
12:32 that reveals that the world cannot afford the collapse of ecosystem services. Even a partial
12:39 collapse would cost 2.3% of global GDP that makes it $2.7 trillion in 2030. The negative growth
12:50 impacts are highest for low-income countries, particularly in Sub-Saharan Africa and in South
12:57 Asia. And this does not even include the direct effects of climate change that run in parallel,
13:04 making these figures of very, very conservative estimate of losses.
13:09 [Karin Kemper]: Now, what policies can we put in place?
13:14 The next slide shows our policy simulations and it shows that there are already nature-smart policies
13:22 which can both reduce systemic risks and generate economic gains.
13:27 Examples considered in our report include domestic and global forest carbon payments,
13:33 shifting agricultural subsidy incentives, and increasing agricultural research and development.
13:40 And we see that ambitious targets, including the 30 by 30 target are within reach,
13:46 particularly when synergies with climate change are exploited. This would require an effective
13:54 global and country level response which builds on a whole-of-economy approach that addresses the
14:00 drivers of biodiversity and economy and ecosystem loss across the economy, a solid science and
14:08 the economic base for action, and measures to support an equitable and inclusive transition.
14:15 [Karin Kemper]: So once these building blocks are in place,
14:18 nature-smart development could be unlocked through six global response areas. You can see them on the
14:24 right hand side of the slide. I'm not going to go through all of them, but you can see that it is
14:31 both on the economic side, but also on the people side working with people and through communities
14:40 and of course, mobilizing finance and leveraging partnerships.
14:45 This in our report, it is quite developed if you are interested to look at that.
14:51 [Karin Kemper]: And then coming to the final slide,
14:55 what is needed going forward? And of course, one of the big discussions is about mobilizing finance
15:02 and public policy will only be truly effective if we can leverage the necessary resources
15:10 to support nature-smart development. In order to adequately scale nature and climate action to meet
15:17 today's challenges, mobilizing finance is really key because delaying investments on
15:24 nature and climate could actually trigger a vicious cycle where climate shocks and the
15:29 collapse of ecosystem services impact economies further, making it impossible to address the
15:36 consequences of climate change and nature loss that we are already experiencing. It's
15:43 therefore necessary to create the adequate and affordable finance flow to developing countries,
15:51 removing key obstacles that stand in the way on both the demand
15:55 and on the supply side. And the private sector there has a really key role to play.
16:02 [Karin Kemper]: To mobilize sufficient
16:04 private finance, a two-pronged approach is necessary. One that finances green activities
16:11 that promote and enhance the ecosystem services that nature provide, but also ones that greens
16:18 finance and that greens financial markets. That will involve directing financial flows away from
16:25 projects with negative impact on biodiversity on ecosystems, but it also means to incentivize
16:33 achievement of sustainability objectives. For example, encouraging the adoption of green bonds,
16:40 the further issuing of green bonds, and ensuring that the scoring of sovereign bonds
16:45 ensures that the state of the environment and its economic value are taken into account.
16:51 [Karin Kemper]: So with that,
16:53 I want to thank you. It's been an honor to share our work with you today. And now
16:58 I'm looking forward to the discussion on how these important analysis can be put into action
17:04 with our distinguished guests joining us in Glasgow. Over to you, Elisabeth.
17:09 [Elisabeth Mealey]: Thank you, Karin.
17:11 Very interesting presentation there and some startling figures, including $2.7 trillion
17:18 in potential losses to economies if we lose some of these incredibly important ecosystem services
17:24 that nature provides. Let me turn to our guests, Mr. Okidi, who's the Permanent Secretary
17:32 for the Ministry of Water and Environment in Uganda. I understand you've been working on
17:40 understanding the value of nature to Uganda's economy and even factoring nature into your
17:47 planning and development planning. Can you just talk us through what Uganda has been doing and
17:54 how you're figuring nature more squarely in your economic planning?
18:00 [Alfred Okot Okidi]: Thank you. Uganda's development,
18:06 that is captured in Vision 2040, and the National Development Plan III is actually nature-led.
18:16 And we realize as a country that there's a big disconnect in terms of understanding
18:28 to what extent the natural capital of Uganda is actually contributing and driving
18:37 the development of the country. And therefore, what we opted for with support of the World Bank
18:45 is opted to get into natural capital accounting because if you know what you're measuring,
18:51 then you can manage it. Because the biggest concern for us as a country right now is the
18:59 amount of degradation and the losses in some of the ecosystems. And yet when you look at the basic
19:10 figures like the foreign earnings, for example, tourism is actually I think the number two foreign
19:16 exchange earner before the COVID pandemic came in. It was actually projected to be the number one.
19:22 [Alfred Okot Okidi]: So it is very important
19:24 for us as a country that these natural resources basis
19:28 are actually understood and then we protect them. So it has led to now at the development level,
19:39 highest development level, the country adopting the national capital accounting. It has also
19:44 driven the government to come up with a decade of restoration which was launched just about
19:52 two months ago after being passed by cabinet to see how we can restore all these ecosystems that
19:59 are critical to ensure that future generations also benefit from these nature-given resources.
20:11 The reason why we want these natural capital accounting really in is because we need to
20:20 understand and value because if we value, then we can treasure what roles it plays.
20:26 [Elisabeth Mealey]: I'll come back to this
20:30 a little more in detail, but first I want to turn to Mari Pangestu, our managing director,
20:37 to talk about how the World Bank has been working on this for quite a long time. It's
20:43 really been over 10 years that natural capital accounting has been a key priority for the World
20:49 Bank and supporting countries like Uganda to do it. How do you see this work contributing
20:54 to the broader mission of the bank on poverty reduction and promoting shared prosperity, Mari?
20:59 [Mari Pangestu]: Yes. Thank you for the question, Elisabeth.
21:03 I think we can start by where the permanent secretary left off. Mother nature doesn't need us,
21:10 but we need mother nature because it provides the ecosystem services that allows us to breathe,
21:17 to eat, and to live. And the loss of nature
21:23 and it's critical ecosystem services hurt the poor the most. That's why it's a development
21:29 imperative for us to address it. Karin mentioned some of the numbers and it comes from the three
21:39 major reports that Karin mentioned, including the one that we are talking about today,
21:43 which is the Changing Wealth of Nations. Just to add to Karin's numbers, 3 billion people depend on
21:49 marine and coastal biodiversity for protein intake and livelihoods. 75% of food crops
21:56 rely on animal pollination. And the poorest rural areas get income from forest resources
22:02 more so than agriculture. And so they will suffer the most from the depletion of forests.
22:08 [Mari Pangestu]: And the collapse of ecosystem services,
22:11 Karin mentioned the 2.7 trillion number. If you translate that into loss of GDP, it's 10% lower
22:19 GDP for Sub-Saharan Africa and 7% loss of GDP in South Asia by 2030. So this is all the loss of
22:30 nature and ecosystem services also impacts on climate change as Karin mentioned. And that
22:35 will have a double impact on poverty because business as usual scenario is leading us to
22:42 an estimate of 130 million more people which will enter into extreme poverty. So we need to address
22:49 and reverse the decline in natural capital. And to do so, as the permanent secretary mentioned,
22:56 we need to put a value to nature. We need to measure the value of nature going beyond GDP
23:04 and provide the economic argument for protecting nature, conserving nature, and restoring nature.
23:13 [Mari Pangestu]: And this is key to internalize
23:16 the value of nature in markets and government policy. So natural capital accounting is one tool
23:24 and the data and the analysis that's coming out of the Changing Wealth of Nations
23:28 is addressing this very important data gap for policymakers to help them guide
23:36 to have more nature and climate-smart policies that will... I think it's very important to
23:43 emphasize because we are making the economic case for development as to why you need to
23:50 protect nature and ecosystem services and it's linked to climate. It's about conservation, it
23:56 is about restoration in some instances, but it's also about the use of the natural assets that you
24:03 have in a sustainable way, right? It's not about just conservation because a lot of times there is
24:09 kind of a pushback because, oh, conservation. Then where do the livelihoods go? But you can do all
24:17 three, conserve, restore, and sustainable use of the resources like tourism as was mentioned by the
24:26 permanent secretary. And it creates a lot of value if you can measure it and then you can manage it.
24:33 [Elisabeth Mealey]: It's a line we've heard before,
24:35 but it's certainly true when it comes down to protecting what matters most. So thanks Mari.
24:43 Mr. Okidi, you did mention there that nature is a key part of your tourism, what's attracting people
24:52 to Uganda and it's therefore becoming a huge driver of economic growth in your country.
24:59 Can you tell us more about some of the drivers of nature loss?
25:02 You have a massive forest resource in Uganda. What's driving this degradation and how is
25:10 something like natural capital accounting that we've heard about today helping make a difference?
25:15 [Alfred Okot Okidi]:
25:17 Okay. There are primarily about four drivers of degradation in Uganda. The first one is poverty.
25:29 People go to look for livelihood and resources to survive
25:34 in these forests because of the poverty level. The second one is because of the rapid growth in
25:43 population and the demand for agricultural land. And given that our agriculture is nature-based,
25:50 you find that people are moving into the forest, the swamps, and even the slopes of the mountainous
25:59 areas that are quite dangerous to do cultivation. So the drive is for agriculture. And then
26:07 nearly 95% of the population of Uganda still depend on the energy sources for cooking
26:16 on biomass. That is charcoal, firewood. So the venture, especially into the forest
26:25 to look for that energy for cooking. We have also witnessed opportunities traders,
26:34 especially from without Uganda who have gone after very exotic species and rare species
26:41 and they have been actually harvesting them like the [inaudible 00:26:45] africana and the shea nut
26:49 tree with disastrous consequences. So these are the four primary drivers of degradation in Uganda.
26:59 [Elisabeth Mealey]: So in a way you have to attack multiple problems
27:05 in a whole development plan taking on all of these drivers at once.
27:09 How do you go about doing that? Your new Vision 2040 is interesting from that point of view.
27:16 [Alfred Okot Okidi]: The solution lies in actually addressing
27:19 these drivers in an integrated and holistic way. And one of the things that Vision 2040
27:28 tries to is actually transform the country into middle income by 2040. And to do that,
27:35 we need to move the agricultural practices from the peasantry type into commercial,
27:42 which is matte. And therefore, it implies using less or the same amount of land,
27:50 but producing more. So the issue of technology comes into place, the issue of water storage
27:57 so that people can cultivate the same piece of land maybe three or four times in a year and end
28:04 up earning six to 10 times what they're earning right now. So that is one of the solutions.
28:10 [Alfred Okot Okidi]: The other solution is to look at
28:14 shifting the energy usage from biomass. And in this regard,
28:22 it is a gradual transition looking at energy-efficient solutions like the
28:27 energy-efficient cooking stoves, but also encouraging people not to go to the natural
28:36 forest or the natural trees for biomass, but instead plant the fast maturing species
28:44 that they can use because some of them within a period of one and a half to two and half years,
28:48 they're already ready. So that is a drive for now as we transition into cleaner energy sources.
28:58 [Alfred Okot Okidi]: On the other side, enforcement
29:02 is being strengthened and we are also coming up with more robust legal protection because
29:08 some of the laws at the moment we realize actually do not give commensurate punishment if
29:16 you compare with the value of the resources that is being laid to waste. Because somebody destroys
29:24 exotic species worth maybe 200 million shillings, but he pays a fine of just about
29:31 80,000 shillings. So there's a disconnect. So we want to address that. But the principle is let
29:40 the population coexist with nature. So it is something like the MD said, really making
29:49 sure that you don't ban people, but make them co-exist peacefully and in a sustainable way.
29:55 [Elisabeth Mealey]: So it's this value on nature that we're
29:58 talking about today that has a benefit for people. So it's bringing that value to that awareness.
30:04 Mari, given what we've heard here today on the importance of natural capital for development,
30:10 how is the bank as a big institution working with countries actually making a difference? And
30:16 what are we actually doing to support this effort to put a value on natural capital?
30:22 [Mari Pangestu]: I think we are doing quite a lot globally and
30:26 at the country level because we see the critical link between nature, climate, and development.
30:34 And we need to invest in both nature and climate. So globally, we have the data and analytical work
30:41 that was described and presented by Karin. Today we talked about the Wealth of Nation's report.
30:48 Karin also mentioned other reports, but the data and analytics are key to be able to guide
30:55 policymakers so that they can make the informed decisions that will lead you to, I like the way
31:02 permanent secretary put it, so that nature and people can coexist in a sustainable way. So you
31:07 want both, right? You want the development, but you also want to protect the value of nature.
31:13 [Mari Pangestu]: And at the national level,
31:16 we are helping governments with the data and analytics to calculate the trade-offs
31:24 and figure out what types of policies you can achieve both. So once you identify the drivers of
31:31 the natural resource depletion, you can't just say, let's stop it. You need to find
31:36 an alternative. People's livelihoods are at stake, so you have to provide an alternative. Like in the
31:42 case of many of the forest fires, for instance, in Indonesia, it's traditional slash and burn
31:48 agriculture. And if you're not providing them alternative ways to do their agriculture in a
31:54 sustainable way, they'll still continue to do it, right? No matter how much enforcement you do. So
32:00 you do need to provide the kind of policies in an integrated way and provide the incentives as well
32:07 as the disincentives like the enforcement and the fines that was just mentioned.
32:11 [Mari Pangestu]: So I think we need to really
32:15 link efficient management of natural capital in a country with also the development outcomes. And in
32:23 our new Climate Change Action Plan with commitment for 35% of our financing going to climate
32:31 action, we are including nature-based solutions in all aspects, territorial,
32:39 coastal, marine, and mobilizing additional resources for nature and climate building on
32:46 our long history of working on biodiversity. And in particular for IDA20 because earlier,
32:53 we mentioned that the decline in natural capital and ecosystem services hit the poorest countries
33:00 the most and hit the poorest in these countries even more. So in the IDA20 replenishment,
33:06 we are very much focusing on the synergy between nature, climate, and development.
33:11 [Mari Pangestu]: Just a few examples. In India,
33:13 we are doing integrated coastal zone management restoring 19,500 hectares of mangrove
33:21 and investing in pollution management. In the lower Mekong region, which is the third largest
33:28 area for tropical forest, we are doing sustainable forest to scale. And another example, basically
33:37 last year we did 116 million hectares of marine and coastal protected areas, 10 million hectares
33:45 of terrestrial protected areas, and over 300 protected habitats, biological buffer zones,
33:52 and resources. So this is just examples of just how much work we can do and that we should do.
33:59 [Mari Pangestu]: And Karin and permanent secretary
34:03 also mentioned to do that you need financing, right? So how do we expand financing beyond
34:11 our commitment for 35% of our financing going for climate, including nature-based solution?
34:18 I think we were the first institution actually to issue a global green bond in 2008 catalyzing
34:27 sustainable investment in capital markets. So I think countries sovereign such as Uganda
34:32 have the potential to issue green and blue bonds, sukuk, green sukuk bonds. These are all
34:39 instruments that countries have actually issued to raise funds for this. And then there's the
34:46 public-private partnership with blended finance solutions where again, conservation
34:53 with other nature-based activities that is about conservation, restoration,
34:57 and livelihoods. I think we need to keep our focus on that and help countries develop such policies.
35:06 [Elisabeth Mealey]: Well, thank you.
35:08 You make the connection there between nature and climate, which is good because we are at a climate
35:12 COP. Mr. Okidi, here in Glasgow, how is what your country doing being noticed in terms of climate,
35:23 the importance of keeping Uganda's forests intact to addressing climate change. How
35:32 is that connection being made? And then as Mari raised, the need for finance. Are some of these
35:39 innovative financing tools like green bonds interesting to Uganda potentially going forward?
35:45 [Alfred Okot Okidi]: Okay. Thank you.
35:50 We have signed onto stopping deforestation and as a country, we're one of the signatories already.
36:03 We are on the taskforce for long-term financing. We are actually one of
36:10 the pioneers that are going to actually pilot it globally on behalf of the LDCs,
36:20 but also on the side of adaptive resilience, we are also one of the seven LDCs that are actually
36:30 chosen. And we have started the implementation of that so that what we do in terms of adaptation and
36:39 at the same time, conserving the environment, we can share with colleagues in the least
36:43 developing countries. So we had quite a lot of interaction and a lot is happening. And
36:51 the proposal, the promise of 100 billion I think is welcome. And from the various fronts,
36:58 we see a lot of proposals coming in and we wait for the implementation to make sure that the
37:06 100 billion comes on board. And our emphasis is that it should go a lot more towards adaptation.
37:12 [Alfred Okot Okidi]: Now, coming to financing, yes,
37:19 the talk in the past has been between government to government to look for funding
37:25 to address climate change, but it is pretty obvious that we need to look at solutions beyond
37:34 the government or the regional blocks, or even from the multi-national government banks
37:41 to address this problem. And
37:47 coming up with blended financing I think is one which I think Uganda has already done it with
37:54 the World Bank because we have a project that I think we've just launched. And it is actually
38:00 investment in forest and protected areas. And we have loan from the World Bank, we have grant that
38:08 is coming from the GCF that has been blended. And the quantum of the money has grown to the
38:15 extent that we believe it is a kind of arraignment that can help us address issues of climate change.
38:22 [Alfred Okot Okidi]: The same with the private sector.
38:27 In Uganda, we have already started and we have actually a framework where we are bringing
38:32 on board the private sector, and they've made voluntary undertakings using their own resources
38:39 and they're committed to every year for the next five years, planting at least 75 million trees.
38:46 And two of the breweries who anyway use the water resources from the swamps and the forest
38:54 [inaudible 00:38:55] have come up and they're very active in this particular program and they're
38:58 also involved in the restoration of swamps and protection of some of two rivers in the country,
39:05 which is actually a very good development. What I noticed is that the gap between the
39:13 public sector and the private sector on issues to do with climate change is too wide and it
39:18 needs to be brought up so that the private sector understands why they need to get involved in this
39:24 and why they need to commit resources because it is their sustainability that is at stake.
39:29 [Elisabeth Mealey]: Very interesting and a
39:31 very big theme here in COP this week and probably into next week as well.
39:37 How do we get the policies right so that the investment flows? So
39:42 all part of the same conversation around wealth accounting. Let me bring this to a conclusion
39:48 with you, Mari, on the other COP that is important to us all as well, the UN Biodiversity COP coming.
39:58 It was recently kicked off in Kunming, China, but that will be playing out during 2022. What
40:07 do you see as the connection between these two COPs, COP15, CBD, and COP26, 27 coming forward?
40:14 [Mari Pangestu]: They are intricately
40:18 linked because they're interrelated crisis. The biodiversity loss and the climate change
40:25 crisis are interrelated, as we have been discussing. And as I was walking to have this
40:32 session, I passed a sign which said on one side, nature is climate. And then on the other side,
40:38 climate is nature. So it's two sides of the same coin. And climate change leads to ecosystem losses
40:46 and you need healthy ecosystem services to play a role in mitigation, adaptation,
40:52 and resilience. We need healthy forests, wetlands, oceans, grasslands, to serve as carbon sinks
41:00 to mitigate. And it is also a source of economic value as was just mentioned.
41:08 These sinks, carbon sinks, it's a lot of talk about it here in this COP.
41:13 How can you get carbon credit and offsets for that to be able to finance that effort?
41:20 [Mari Pangestu]: So I think climate change and ecosystem
41:24 services protection is very key again, because we know the impact... If we don't do that,
41:30 the impact on development and the poorest. If we didn't do anything business as usual scenario,
41:37 it will really hurt the poor the most. So we need transformative and coordinated actions on both
41:44 natural and ecosystem services losses and the climate crisis. We need to manage both crises
41:50 in an integrated and interrelated way. And in fact, our estimate is showing that nature-based
41:57 solutions can provide 37% of cost-effective climate mitigation
42:05 efforts till 2030. So that's quite a huge proportion or contribution to climate mitigation.
42:13 [Mari Pangestu]: And we've been mentioning mangrove. So
42:17 let me give you an example from my own country, Indonesia. World Bank is helping Indonesia to
42:23 do mangrove restoration. I think it's 600 million hectares over the next five years. And it has
42:33 a triple benefit because it's part of the green fiscal stimulus program of Indonesia right now. So
42:41 you create cash for work for the communities that live around there and benefit from that coastal
42:48 area to do the restoration. So they're getting cash for work as the economy hasn't picked up.
42:55 And then once the restoration happens, they will have improved livelihoods from the restored
43:01 mangrove and the coastal area that becomes more healthy and so on. So you have a triple benefit
43:08 of livelihoods, income, and then the climate benefit and then of course protecting the
43:17 ecosystem services benefit. And it's not just livelihood today, but livelihood in the future,
43:24 right? So I think that's really the value of nature capital that we really need to protect.
43:31 [Mari Pangestu]: So just to close on the financing gap that was
43:36 mentioned, totally agree. It can't just come from public funding. The financing gap is $700 billion
43:44 per year on average till 2030. So we really need an integrated nature and climate
43:53 approach and a link between the biodiversity framework that's going to emerge from Kunming
44:02 post-2020 and the Paris Agreement. This is the work for us ahead.
44:09 And with that and government policies and the value of nature being more measured and managed
44:16 and clearly monitored, I think you can draw in private sector funding as we had just discussed.
44:23 [Mari Pangestu]: We really need all that to come together
44:26 in an integrated way, whole of economy approach and really clearly measuring the value that you
44:33 are protecting and monitor the actions that go with protecting and conserving and utilizing
44:45 the value of nature. And that's the only way that you'll be able to draw in blended finance.
44:52 That was an interesting example with the brewery and the forest. I think we can find
44:56 many examples where the private sector is actually benefiting from the protection of
45:03 the nature. They can also come in to co-invest not just government in protecting the nature.
45:10 [Mari Pangestu]: I have a similar example in Indonesia
45:13 in an area which grows rubber and it's below the conservation... It's in a conservation forest
45:19 area. So it's a sustainable rubber plantation, but they pay for the buffer around them because it's
45:29 right below a conservation forest and it's also the migration path for the wild animals. So they
45:37 protect the buffer because it's in their interest because they're doing the sustainable rubber
45:41 plantation there. And it was a blended finance. It was funded by blended finance, no government
45:47 involved, with bank that came in and USAID came in with a guarantee and impact investors coming in as
45:57 well. So it can be done, put it that way. Yeah, you just got to be able to structure it right.
46:02 [Elisabeth Mealey]: That is the message. It can be
46:04 done. We have the economic analysis that Karin has outlined. It's clear there's a value that
46:11 needs to be protected and built upon. And there's a huge link to climate. So I think that's the sort
46:18 of great summary of this conversation. I want to thank you all. Mr. Okidi from Uganda, thank
46:24 you for joining us. Mari Pangestu, our managing director at the World Bank, and Karin Kemper in
46:29 Washington, thank you so much for this excellent presentation. That brings us to our conclusion.
46:34 Thank you all for joining and a fantastic prelude to Nature Day tomorrow here at COP. Thanks.

The World Bank Group at COP26

As COP26 takes place in Glasgow, UK, the clock is ticking for high-impact climate action to deliver on the promises of the Paris Agreement. World leaders and national delegations, representatives from businesses, civil society and youth are gathering to tackle the climate crisis. See the full program.

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