Environment or the economy? How Uganda uses natural capital accounts in policymaking

When half of a country’s wealth is natural capital it is vital this resource is managed well. If people, businesses and government policies put natural capital at risk, then long term sustainable development is jeopardised. A recent meeting in Kampala, Uganda, discussed how natural capital accounts can inform better decision making for a viable future.

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Insight by 
Rosalind Goodrich
Rosalind Goodrich is head of research communications at IIED
09 January 2019
An aerial view of Entebbe airport. The airport is located on the shores of Lake Victoria, close to numerous environmentally sensitive wetland areas (Photo: Niranjanoak, Creative Commons via Wikipedia)

An aerial view of Entebbe airport. The airport is located on the shores of Lake Victoria, close to numerous environmentally sensitive wetland areas (Photo: Niranjanoak, CC BY-SA 3.0)

Sustainable development is never straightforward: in a traffic-clogged area, a new expressway connecting Entebbe International airport with Kampala reduces journey times significantly, but its route goes through a major area of wetland.

The answer to this 'economics versus environment' dilemma? A road built on stilts and the wetlands protected. But at what cost? Far less to the environment than it might have been, but presumably a greater total cost for the road.

To the Uganda government’s credit, they balanced the economic cost with the long-term environmental cost and the benefits to society and realised this was the best choice. But what evidence supported their decision? 

Did they have a full set of natural capital data showing the contribution the wetlands made to the economy and society through their facility to regulate water flows, store carbon, release oxygen into the atmosphere and host a diverse range of plant and animal species?

Such an ecosystem account would not be used in all countries but is becoming more common in Uganda. It is a country leading the way in going beyond measuring wealth by GDP alone to collect natural capital data that give a much truer picture of the contribution that natural resources and biodiversity make to the country, both now and in the future.

Including natural capital values in policy decision making

“Uganda is natural resource led,” says Ronald Kaggwa of the National Planning Authority (NPA), one of the institutions leading the way on integrating natural capital into policy decisions and planning at all levels.

Our growth, our economy, our prospects are all driven by natural capital. – Ronald Kaggwa

“We must include natural capital values and the cost of biodiversity loss in our policy decision making, if we want sustainable socioeconomic transformation to a middle-income country status.”

Kaggwa was speaking at the inception workshop for the ‘Integrating natural capital into sustainable development decision making in Uganda’ project, involving the Ugandan National Environment Management Authority (NEMA), the NPA, the Uganda Bureau of Statistics (UBOS), the IDEEA group, IIED and UNEP-WCMC.

The project directly responds to demands to extend Uganda’s capacity to produce natural capital accounts and use them to support integrated economic and land-use planning and policymaking. The workshop was notable for the participants’ united ambition to achieve economic development for Uganda, based on the sustainable use of natural capital to deliver on objectives for poverty alleviation and nature. 

Coherence and collaboration

Participants had a consistent view: to achieve this they must have better management information in the form of natural capital accounts prepared under the UN System for Environmental Economic Accounting Central Framework. Ecosystems and biodiversity should be at the heart of any of these sets of accounts.

To develop this coherent picture of the relationship between Uganda’s economy and society with nature, they would collect data for preparing land quality/degradation accounts, fisheries accounts and a new set of accounts linking nature-based tourism and biodiversity, all with support from the UK Darwin Initiative.

This would require a good deal of collaboration, but again, participants and the project institutions were ready for that. They were already preparing the ground for gathering data: some of it already there, some needing to be collected afresh.

This collaboration will not be confined to the project participants alone. Connections have already been made with other natural capital accounting initiatives – the World Bank WAVES partnership, for example, focusing on forest and wetland accounts. Together these initiatives will build a rich picture of the interaction between the environment and the well-being of Uganda’s economy and society.

By sharing information across initiatives, collaborating agencies aim to reduce risks of duplication and inefficiency and maximise the points of synergy between projects.

Communicating for change

The term ‘natural capital’ is in itself a difficult concept to grasp (the definition the workshop chose was ‘nature providing goods and services for consumption and production’), let alone understanding what natural capital accounting is. 

Building on their experience with IIED and UNEP-WCMC on integrating biodiversity conservation into development policymaking, the Ugandan team was clear that communications and engagement with a range of stakeholders was a vital part of the project. And right from the start, not just at the end.

Participants spent the workshop’s second day mapping out who they needed to engage and how. The stakeholder list was vast, but encouragingly, included many potential champions for promoting the natural capital accounting approach.

So coherence, collaboration and communication, but for what? No doubt there – for change. 

The expressway on stilts is a fine attempt to minimise damaging impacts on the environment, but in other parts of Uganda, bad fishing practices, unsustainable land use practices and activities in protected areas in Uganda are negatively affecting fish stocks, soil quality and animal species. This is to the detriment of small-scale fishers’ livelihoods, fish processing businesses, agriculture and tourism.

There have to be policies that do not consider short-term financial gain alone. Challenging vested interests and weighing up short-term wins against longer-term benefits to society and the environment – as well as the economy – will not be easy.

Debts have to be paid off, businesses must make a profit. But assessing trade-offs using information not just from standard national accounts but also from natural capital accounts will lead to better, more sustainable decisions. It has to be done and Uganda is among those countries showing us how.

About the author

Rosalind Goodrich ([email protected]) is head of research communications at IIED

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