Putting nature in the equation

01 March 2012 | Article

Nature is the missing, fourth dimension of the water-food-energy security nexus, says Dr Mark Smith, Director of IUCN’s Water Programme.

How will the planet cope with two billion more people in an increasingly urbanized and wealthy world? Is there a way to address the additional energy, water and food demand, whilst not degrading our ecosystems even further?

If we continue on the path of business as usual, in less than two decades demand for freshwater globally would be 40% more than what is available. Ensuring water, energy, and food security for all will get more and more difficult. A transformation of our current approaches to managing water is essential and new opportunities must be identified.

This is where the water, energy and food security equation comes in. The ‘nexus’ perspective increases our understanding of the interdependencies between water, energy, food and other policies such as climate and biodiversity.

Nature's services

Ecosystem services are the benefits people obtain from nature. They include water storage by forest soils and wetlands, soil nutrient cycling for food production, water purification, movement of water by rivers, flood regulation, coastal defence and carbon sequestration. Most of these services don’t register in markets and most are ignored in investment for economic development.

Yet The Economics of Ecosystems and Biodiversity study produced a headline figure that one year’s loss of natural capital – ecosystem degradation and biodiversity loss – leads to loss of ecosystem services over 50 years of US$ 2-4.5 trillion.

When we ignore ecosystem services, the costs can be huge.

For poor people, these costs can be ruinous. Construction of the Diama Dam meant that by 1994, the Senegal Delta was starved of annual floods. The Delta became hyper-salinised and choked with invasive weeds. Ecosystem services were gone. Daily income from fishing and livestock grazing was virtually eliminated.

For a developing economy, the costs of ignoring ecosystem services can be crippling. In Rwanda, there are less reliable flows to downstream hydropower because of draining (for farming) of the Rugezi Wetlands and degradation of the surrounding Rugezi-Bulera-Ruhondo watershed. The result: a two-thirds fall in power generation from the dams, a 250% hike in electricity prices prior to 2006, with US$ 65,000 spent daily on diesel for generators.

The missing link

I believe that ecosystem services are really infrastructure – part of the “stock of facilities, services and installations needed for the functioning of a society and economy.” Natural infrastructure is the spine of the green economy and critical to resilience. But it is the missing fourth dimension of the water-food-energy security nexus.

We live in a world where demands on natural resources are rising and resource constraints are tightening. We are told that: the era of readily available water is over; the era of cheap energy is over; the era of cheap food is over.

I have one to add to the list: the era of single-mindedness is over.

We have to manage complexity; it’s no longer plausible to say ‘we must have more hydropower’ or ‘we must have more irrigation’ and stop there. We have to be able to work with multiple, competing objectives: that is the essence of the nexus approach and of living with complexity.

Nature is part of these multiple objectives – it is not an add-on or an afterthought – and certainly not a luxury. Natural infrastructure is an investment option that can help meet several objectives including poverty reduction and biodiversity conservation.

And the benefits often exceed the costs. This is why Beijing municipality invested US$ 1.9 billion from 2001-2005 in watershed protection, why New York spent US$ 1.5 billion on ecosystem management rather than $6 billion on a water filtration plant and why utilities, private companies and NGOs in Quito, Ecuador are building a trust fund for watershed management, now worth US$ 8 million.

Putting nature in the equation gives us the opportunity to think differently.

Seeing the bigger picture

Rather than chasing an infrastructure agenda in which nature is a problem, a cost and a political risk, we can work in systems terms: invest in portfolios of built and natural infrastructure in watersheds and river basins. Nature is then part of the solution – for addressing the multiple objectives of the nexus securities. No strategic package for financing can be complete without investment in natural infrastructure. No Minister making a decision on water infrastructure can be fully briefed until the natural infrastructure options are on the table too.

Taking the lead

There are moves in the right direction in some countries. In the Komadugu Yobe basin in northern Nigeria, federal and state government have created a trust fund aiming for US$ 125 million in investment to restore the basin. The financing goes to river and wetland restoration works but also to strengthening associated livelihoods and creating incentives. Critically, this builds people’s capacities and the institutions for effective, participatory, multi-level water governance.

Clearly nature has much greater values than as infrastructure – the opportunity though is to have nature become part of the solution, not just a frustrating problem to be sidelined when convenient. Investing in natural infrastructure can really put the ‘green’ into green economy.

Nature in the nexus creates new opportunities for innovation and solutions that we will otherwise miss – at a cost to our capacity to tackle the complex, interacting pressures on the globe and on development.