Towards a Green Economy in Sri Lanka: A Forestry Perspective

By Nimal Gunatilleke
Professor at University of Peradeniya

Sri Lanka, having been elevated to a ‘Middle Income Emerging Market’ by the International Monetary Fund in 2010, is steadfastly striving further to enjoy even a higher level of growth,  and human well-being.  However, at this crucial juncture in its accelerated development drive, the economic growth of Sri Lanka  need to be steered along an economically as well as ecologically sustainable  path incorporating the ideals of  Green Economy advocated by the United Nations Conference on Sustainable Development (Rio + 20, 2012).  At this global summit, the member states including Sri Lanka decided to launch a process to build a green economy to achieve sustainable development goals and converge with the post-2015 development agenda (http://www.uncsd2012.org).  

UNEP defines a green economy as one that is low-carbon, resource efficient, and socially inclusive which would result in improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities. This means that in a green economy, growth and employment are driven by public and private investments that reduce carbon emissions and pollution, enhance energy and resource efficiency, and minimize the loss of biodiversity and ecosystem services. The strategic objective in transition to a green economy is therefore, to facilitate economic growth and investment while at the same time taking measures to enhance environmental quality and social inclusiveness leading to sustainable development. According to an IMF  report in 2006, the world economy has quadrupled over the last quarter century, but at the same time on the flip side, 60 per cent of the world’s major ecosystem goods and services that underpin livelihoods have been degraded or used unsustainably. (Millennium Ecosystem Assessment, 2005). 

The common perception that the greening of economies inhibits wealth creation and employment opportunities, and that it is a luxury that only wealthy countries could afford, is changing rapidly.  Developing countries like Sri Lanka are facing major challenges like increasing climate change impacts, energy insecurity and ecological scarcity. A green economy can address these challenges by opening up development paths that are increasingly carbon neutral, promoting resource and energy efficiency and lessening environmental degradation.  Many green sectors could provide significant opportunities for innovative research on sustainable development, incorporating traditional wisdom and indigenous knowledge with modern science in meeting the above challenges. This is especially significant for a small country like Sri Lanka with a proven history of sustainable development over centuries while conserving our richly endowed natural capital. Greening of economy of Sri Lanka has the potential to be a new engine of growth, a new generation of green employment opportunities and a vital strategy to eliminate persistent poverty in a range of important sectors viz., agriculture, forestry, fisheries, fresh water and energy. 

Forests are a foundation of the green economy pillaring much of the earth’s ecological infrastructure.  Forest goods and services are important components of a green economy supporting the economic livelihoods of over one billion people globally, most of whom are in developing countries. Natural forests of Sri Lanka are not utilized for timber extraction any more, having reached a critical minimum of natural forest cover. However, they are still a home to important non-wood forest products (NWFPs) that make a significant contribution to local economies and livelihoods by provisioning food, medicinal and/or health-care resources which are also emerging as export commodities. In addition to these forests being a key component of our natural capital, they also make a vital contribution to ecological service infrastructure (such as carbon sequestration, biodiversity, water and soil conservation, pollination etc.) and also, in no small measure, to nature-based tourism for which Sri Lanka has already gained  global recognition. 

In an emerging greener economic climate in the forestry sector of Sri Lanka, the apparent failures in policies, governance and markets while moving towards unplanned rapid development could eventually affect the very resource base that has the potential for innovative sustainable development that is inherently unique to Sri Lanka. The increasing loss of forests for competing land uses for such unplanned development projects is the result of such policy and governance failures that render forest degradation and eventual deforestation.  These are compounded by market failures, as not all of the vital ecosystem services provided by natural forests are captured in markets and hence in the national accounting systems,  thus risking future investments in green economic initiatives.

At a global level, there is a significant paradigm shift to include ecosystem goods and environmental services in to national accounting systems.  At the 2010 Biodiversity Summit held in Nagoya, Japan, 193 countries agreed to a strategic target to incorporate the values of biodiversity into national accounting and reporting systems by 2020.  A major step towards achieving this vision was taken recently with the adoption by the UN Statistical Commission of the System for Environmental-Economic Accounts (SEEA). The SEEA provides an internationally agreed method, on par with the current System of National Accounts (SNA), to account for natural resources like minerals, timber, and fisheries. This was followed by the UN led study, The Economics of Ecosystems and Biodiversity (TEEB, 2010), which called for national accounts to be upgraded to include the value of changes in natural capital stocks and ecosystem service flows.  The Rio+20 agreement calls for taking steps to go beyond Gross Domestic Product (GDP) to assess the well-being of a country. In traditional market economics, the macro-economic policies are largely based on information flowing from the System of National Accounts often measured by the GDP.  The GDP looks only at one part of the economic performance – national income and output- but does not take into account the sustainability of its wealth or growth.  For example, when a country exploits its non-renewable natural capital like mineral resources or fossil fuels, it is actually depleting its wealth which is not captured in conventional GDP measures. Similarly, pollution and declining of ecosystem services resulting from such activities have thus far been treated as ‘environmental externalities’ and not appearing anywhere in national accounts. In a green economy, the world is aiming to move beyond traditional GDP and initiate incorporating their natural capital into their national accounts to make better informed decisions. 

A recent report by the TEEB for Business Coalition estimates that the global top 100 environmental externalities (= impacts) are costing the economy world-wide around US$4.7 trillion a year in terms of the economic costs of greenhouse gas emissions, loss of natural resources, loss of nature-based services such as carbon storage by forests, climate change and air pollution-related health costs (Trucost, 2013).

Taking all these emerging scenarios into account, there are both challenges and opportunities for greening the forestry sector  further  in Sri Lanka by moving towards    i) the  re-establishment of connectivity among remaining fragmented protected areas through forest restoration to improve the quality of natural forest capital, ii.) the establishment of  economically and ecologically sustainable forest management criteria and indicators based on green economic criteria for certification (including forest  plantations, mixed forest gardens  and agroforestry systems), iii) the implementation of the concept of reducing emissions  from forest degradation and deforestation (REDD+),  iv) capturing the true contributions of forests in national accounting systems and v) consideration of payments for ecosystem services (PES).

  

The PES system is currently gaining wide acceptance (but not without a share of its critics) in both developed and developing countries where forest land owners are paid annually for providing watershed protection, carbon storage, recreation, biodiversity conservation etc.  For example, the New York City water utility, faced with the need to improve water quality, provides incentives to farmers and owners of forest lands in the catchment areas to conserve the forest and adopt environmentally friendly management measures. This has apparently proved far less costly than building water-filtration systems (Landell Mills and Porras, 2002). Similarly, in north-east France, the mineral water producer, Vittel, has paid local land-owners for conserving the watershed (Perrot-Maitre, 2006). There are similar sustainable examples from developing countries like Ecuador and Costa Rica.  In Sri Lanka too, there are ample opportunities for researchers to critically examine the feasibility of implementing REDD+ and PES schemes at the levels of village, district, province and the entire country which will capture their true contribution to accounting at each respective level and eventually at the national accounting system. This would help to internalize the wholesome value of forest ecosystem services for forest land owners (including mixed-species forest garden owners) and ensure that the forests are worth more standing than cleared for alternative land use (Viana, 2009).  In Sri Lanka, we already have excellent historical examples like the Ellangawa – the cascade system of irrigation water management - with due consideration given for their watershed conservation. In a more recent development, over 70 per cent of tea cultivation is in the hands of small-holders owning less than two hectares per family mostly in the lowlands. They are interspersed among the mixed-species homesteads forming a landscape mosaic of forest and tea gardens. Some of these have diversified further by incorporating economically important tree crops as shade trees, spice plants etc. A wholesome environmental economic valuation may find that the ecosystem services and goods provided by such a landscape mosaic may be greater than the conventional monoculture tea plantations, exotic timber plantations or expanding vegetable cultivation in environmentally sensitive mountain areas of Sri Lanka.

The social impacts of reforestation involving large scale monoculture exotic cash-crop plantations in critical watersheds is very controversial in many countries and Sri Lanka is no exception. There is increasing evidence from countries like South Africa,  where over 1.5 million ha of fast growing and high yielding monoculture plantations mostly of exotic tree species like those of  Eucalyptus are spread over into watersheds, that these do affect stream flow and catchment water yield. The National Water Act 1998 of South Africa based on long-term hydrological research has taken measures to regulate the stream-flow reduction activities and limit the spread of further afforestation in critical catchments where available water resources are fully or over-committed (Dye and Versfield, 2007). 

In the Sri Lankan context, the National Physical Plan for Sri Lanka from 2011- 2030, proposes reforestation of areas in the ‘central fragile area’ having slopes with a gradient over 60%  in four districts viz. Nuwara Eliya, Ratnapura, Kandy and Kegalle totalling 133,630 ha  that are currently under cultivation (Anon., 2008). This being the main catchment area of almost all major rivers of Sri Lanka, the choice of species for reforestation needs critical scientific evaluation with emerging evidence from other countries  as to raising fast-growing exotic monoculture tree plantations in the prime watersheds. The  FAO underscores the significance of maintaining cloud forests for production of water, erosion control and biodiversity by  stating that conservation of such forests designated as protected areas  should be a national priority (Hamilton, 2008).  There exists a huge void in research on restoration of degraded montane cloud forests of Sri Lanka with native species and their economic valuation.  Therefore, it is of vital importance that restoration research in mountain areas be given the highest priority in forestry research and development. 

The biofuel plantations are also promoted as a green energy source in Sri Lanka as in many other countries in the world.  However, some of the species used are known to be heavy water users and as such, establishing such plantations in the watersheds without site-specific research would lead to both ecological and economic consequences (de Fraiture, 2008). These biofuel crops, if selected for reforestation in ‘Central Fragile Region’ of Sri Lanka, will  escalate competition for both land and  water with other environmentally friendlier land uses such as restored native forests and  mixed species forest gardens, especially in areas where water is already scarce as in some areas of Nuwara Eliya and Kandy districts. 

It is indeed, a challenge facing Sri Lanka at this crucial phase of rapid development outlined in the National Physical Plan 2011-2030 to engage, at the same time, in an emerging global initiative to drive towards a green economy.  Nonetheless, it opens up many opportunities for both research and development in order to be aligned and repositioned with the evolving global scenarios in the forestry sector as well as in other sectors, so that costly remedial measures in the future could be avoided by visionary planning.  Sri Lanka is richly endowed with a religio-cultural heritage that is inextricably linked with its equally rich natural heritage. To move towards a greener economy while learning from past experiences and judiciously blending them with innovative thinking to suit modern situations is the need of the hour. We do have the potential to develop models in appropriately greening the forestry as well as other related sectors towards meeting our own sustainable development goals. The challenge now is to redefine the vision for forests of Sri Lanka in the light of the emerging sustainable development goals and  build the necessary in-country capacity to demonstrate its benefits to policy makers in our move towards a greener economy.

References

Anon., (2010),   National Physical Planning Policy and Plan, Sri Lanka-2030, 104 pp.

Dye, P.  and D. Versfeld, (2007). “Managing the Hydrological Impacts of South African Plantation forests: An Overview,” Forest Ecology and Management 251:121-128.

Hamilton, L. S. (Ed.) ( 2008),  Forests and Water,  FAO Forestry Paper No.155.

de Fraiture, C. , M. Giordano, and Y.  Liao, (2008),  “Biofuels and Implications for Agricultural Water Use: blue impacts of green energy.”  Water Policy 10 Supplement 1: 67-81.

Landell Mills and Porras, 2002. Silver bullet or fool's gold? A global review of markets for forest environmental services and their impact on the poor. International Institute for Environment and Development, London, UK. P. 138.

MA (2005),  Millennium Ecosystem Assessment. Ecosystems and Human Well-being: Synthesis” Island Press, Washington, DC.137 pp.

Perrot-Maître, D. (2006),  The ‘Vittel payments for ecosystem services: a “perfect” PES case?’ International Institute for Environment and Development, London, UK.24 pp. 

Rio+20 (2012), “ The Future We Want”  www.un.org/futurewewant

TEEB (2010), “The Economics of Ecosystems and Biodiversity Report for Business - Executive Summary”. 

Trucost (2013),   “Natural Capital at Risk – The Top 100 Externalities for Business”    http://www.teebforbusiness.org. 

UNEP (2011),   “Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication - A Synthesis for Policy Makers”, www.unep.org/greeneconomy. 45 pp.

Viana, V.M. (2009), “Financing REDD: Meshing markets with government funds”. IIED briefing, March. International Institute for Environment and Development, London4 pp.

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The writer, Nimal Gunatilleke is a Professor of Botany at the University of Peradeniya. He counts over 35 years research and teaching experience, relating to biology of natural and plantation forests in Sri Lanka. His research interests cover soil biology and nutrient dynamics, plant reproductive biology and population genetics, spatial distribution and species co-existence in lowland rain forests, and ecological restoration of degraded lands. Most of his long-term research has been in Sinharaja World Heritage Site and the Knuckles Forest Reserve. He has been a co-recipient of the prestigious Sultan Qaboos prize of UNESCO in 1997 for environmental preservation, given in recognition of their outstanding contribution to the management/ preservation of the environment.