The trade for nature's bounty

THE Murray-Darling dilemma is a small part of a greater global problem.

World Wildlife Fund Australia's chief executive Dermot O'Gorman. Picture: Renee Nowytarger

THE Murray-Darling dilemma is a small part of a greater global problem.

THE clash of interests between farmers, consumers and conservationists over water rights in the Murray-Darling basin is a microcosm of a much larger global debate now reaching a crescendo over how we should pay to preserve the planet.

Just as the Murray-Darling faces ecological collapse because too many water licences have been issued by state governments, the long-term trend for the planet's natural resources has been calculated as similarly dire.

In its Living Planet Report 2010, released today, the World Wildlife Fund estimates annual global consumption of resources is running at 1 1/2 times the planet's ability to regenerate. With the Living Planet series now running for four decades, the WWF says the consumption trend is unambiguously up and, with the global population expected to rise to nine billion people, it is accelerating.

"I like to use the analogy of a bank deposit," WWF Australia chief executive Dermot O'Gorman says.

"If we live off the interest payments we are living sustainably but if we draw down on the principal each year we are reducing the interest and over the long term we are leaving an ecological debt."

The concept of valuing ecological services is not new -- growing out of the 1992 Rio conference -- but debate about it is reaching new heights with the accumulation of historical data and the development of better ways to measure biodiversity and ecological losses.

The push to put a price on carbon in an attempt to alter industry and consumer behaviour in response to climate change is perhaps the thin edge of a much bigger wedge in a move towards environmental accounting.

Behind the scenes, there is a building movement to value and account for the contribution to humankind of all living systems from forests and rivers to the sea.

Organisation for Economic Co-operation and Development secretary-general Angel Gurria has said the protection of biodiversity and ecosystems must be a priority. "Business as usual is not an option," he says.

Under WWF modelling, a business as usual scenario will result in humanity using resources and land at the rate of two planets each year by 2030 and a little more than 2.8 planets each year by 2050.

According to O'Gorman, the rising interest of the OECD and World Trade Organisation in the concept of pricing ecological services is significant.

"I think when you are seeing [the] OECD come out with these things there is recognition that the trajectory we are on is the wrong one," Gurria says. "We have to move to a population of nine billion people and there is a limit to environmental resources.

"We can be more efficient but we also need to put the right message in place about being more sustainable when extracting resources so we can continue to keep the quality of lifestyle that society aspires to but allow for the reality of nine billion people."

The WWF's latest global Living Planet Index, which charts the trends in 7953 populations of 2544 mammal, bird, reptile, amphibian and fish species, shows a decline of about 30 per cent between 1970 and 2007.

But whereas the tropical LPI index has declined by about 60 per cent in less than 40 years, the temperate LPI has increased by 29 per cent during the same period.

This is in large part because temperate region resources were more heavily depleted before the index data started to be compiled.

But it also demonstrates the link between increased wealth and community demands for better environmental management and repair.

In a speech to statisticians last month, Treasury secretary Ken Henry said gross domestic product dealt poorly with environmental matters. He said addressing market failures in the allocation of environmental resources was a classic problem of economics, not just one for environmental experts. He said the interim report of the Economics of Ecosystems and Biodiversity study, hosted by the UN Environment Program, had provided strong evidence for significant global and local economic losses and human welfare repercussions attributable to the ongoing losses of biodiversity and degradation of ecosystems.

The second phase of the study is expected to be completed this month and will focus on "developing a framework and methodology for ecosystem valuation; developing toolkits for sustainable development for policy-makers at all levels; and raising public and business awareness and access to information and tools for sustainable development and conservation."

Reducing global consumption is not the only way to bring the relationship between the Earth's productive capacity and human environmental demands back into balance.

The other option is to increase the biocapacity of the planet. The Earth's bioproductive area can be expanded by reclaiming degraded lands and making marginal lands more productive. Restoring forests or plantations on degraded land increases biocapacity not only through producing timber but by regulating water, preventing erosion and salination, and absorbing carbon dioxide.

Increasing the yield of crops per unit area also can increase biocapacity. Big gains can also be made in cities, where $US350 trillion ($354 trillion) will be invested in urban infrastructure during the next 30 years.

To promote change, O'Gorman says there should be a healthy debate about the appropriate price to put on environmental services, as there now is with carbon.

"There is a competitive nature to this," he says. "We want to see Australian companies position themselves to take a leadership role in the region, using their expertise and know-how to correctly price carbon and other environmental services."

O'Gorman says there is a false assumption that an environmentally sustainable approach will always be more expensive than existing methods.

"I think there are two answers to that," he says. "First, there are many solutions that are not more expensive and if they are more expensive they are often newer technologies that in a very short time will come down once you get the economies of scale that come with wide-scale adoption."

O'Gorman, who has spent the past five years in Beijing with the WWF, says China is investing billions of US dollars in wind and solar technologies. "Their ability to take technologies and mass market them is well demonstrated and this is something that will drive the sector for the next decades."

O'Gorman says there is also the issue of the balance between short-term and long-term costs.

"This report shows we are leaving an environmental debt to our children that is increasingly growing, and studies that are well documented show the cost of doing nothing adds up to 20 per cent to GDP over the next 20 years."

The next formal meeting to discuss the issue, the 10th Conference of the Parties to the Convention on Biological Diversity (COP10), will be held in Nagoya, Japan, later this month.

The conference has set a target of halting the world's biodiversity loss by 2020.

Australia's Environment Minister Tony Burke says development, land clearing and climate change have put extraordinary pressure on many species and meetings on biodiversity such as COP10 are an attempt by governments across the world to put some pressure back in favour of survival and against extinction.

"None of this is easy; the targets that were previously set to put aside areas for nature conservation have been met by Australia. We have a good story to tell and are being recognised for this at the meeting," he says.

Burke says it will be important internationally that the COP10 conference takes stock of where previously agreed targets have been delivered, where they have fallen short and why.

O'Gorman says the global community should "agree on the things that need to be agreed upon".

"Let's address the issues of financing and technology transfers that allow the global community to put these measures in place," he says.

He says in Australia, the government needs to set the regulatory framework, industry needs to become more efficient and provide more environmental goods and services, and consumers need to be prepared to take up solutions that are available now.

As a big exporter of agricultural produce, Australia has a large stake in how the global debate unfolds.

As the Living Planet Report shows (see map), global biocapacity is not evenly distributed.

A country's biocapacity is determined by two factors; the area of cropland, grazing land, fishing grounds and forest located within its borders, and how productive this land or water is.

An analysis of biocapacity by country reveals that more than half the world's biocapacity is found within the borders of 10 countries.

According to the WWF analysis, Brazil has the most biocapacity, followed in decreasing order by China, the US, the Russian Federation, India, Canada, Australia, Indonesia, Argentina and France.

Adjusted for population, Gabon has the highest biocapacity per person, followed in decreasing order by Bolivia, Mongolia, Canada and Australia.

Countries such as Canada and Australia, therefore, have the opportunity to use and consume more or to export their excess.

Countries such as Singapore or Britain have a deficit that can be met only by relying on the productivity of other countries' resources.

The WWF argues the cost of these ecological services should be reflected in the price paid for imported goods.

"Where the rest of the world is drawing down on our biocapacity, we are in a very important position going forward," O'Gorman says.

"I think the trick will be to ensure that demand, [which] is only going to increase, doesn't draw down more of our biocapacity."