WORLD RESOURCES 2005 The Wealth THE WORLD BANK of the Poor WORLD RESOURCES Managing Ecosystems to Fight Poverty WORLDINSTITUTE RESOURCES INSTITUTE WORLD RESOURCES 2005 WORLD RESOURCES REPORT PRINCIPAL PARTNERS Gregory Mock, Editor-in-Chief United Nations Development Programme Peter Whitten, Managing Editor Olav Kjørven Emily Cooper, Research Assistant Charles McNeill Carolina de Rosas, Review Coordinator United Nations Environment Programme Dennis Gadel, Intern Marion Cheatle Jacquie Chenje Daniel Tunstall, Director, Global Information Program Mirjam Schomaker (consultant) Norbert Henninger, Deputy Director, Global Information Program World Bank Antonio LaViña, Senior Fellow James Warren Evans Hyacinth Billings, Publications Director Kirk Hamilton Lori Han, Production Advisor World Resources Institute David Jhirad DATA, MAPS, AND GRAPHICS Robert SanGeorge Amy Cassara, Senior Associate Daniel Prager, Research Analyst ADJUNCT PARTNER Janet Nackoney, GIS Lab Manager UNEP/GRID-Arendal Robert Soden, Research Assistant Steinar Sørensen Rajiv Sharma, Intern Otto Simonett Brianna Peterson, Intern Christian Nellemann Philippe Rekacewicz CONTRIBUTING WRITERS Marianne Fernagut Emily Cooper Luana Karvel Polly Ghazi Morten Wasstøl Karen Holmes Karin Krchnak ADVISORS Yumiko Kura Jon Anderson, United States Agency for International Development Antonio LaViña Anna Ballance, United Kingdom Department for International Development Daniel Prager Jill Blockhus, World Bank Paul Steele Jan Bojö, World Bank Wendy Vanasselt Owen Cylke, World Wildlife Fund John Virdin Peter Hazelwood, United Nations Development Programme Timothy Kasten, United Nations Environment Programme WORLD RESOURCES 2005 EDITORIAL BOARD Ashok Khosla, Development Alternatives Robert SanGeorge Onesmus Mugyenyi, Advocates Coalition for Development and Environment David Jhirad Urvashi Narain, Resources for the Future Allen Hammond Frances Seymour, World Resources Institute Philip Angell Priya Shyamsundar, World Bank David Smith, United Nations Environment Programme Paul Steele, United Kingdom Department for International Development PUBLICATION DESIGN Alston Taggart, Barbieri and Green 2 WORLD RESOURCES 2005 WORLD RESOURCES 2005 The Wealth of the Poor Managing Ecosystems to Fight Poverty United Nations Development Programme United Nations Environment Programme World Bank World Resources Institute WORLD RESOURCES INSTITUTE WASHINGTON, DC WORLD RESOURCES 2005 The World Resources Institute wishes to acknowledge three organizations whose support has been indispensable in bringing World Resources 2005 to publication: Netherlands Ministry of Swedish International United States Agency for Foreign Affairs Development Cooperation International Development Agency World Resources 2005: The Wealth of the Poor—Managing Ecosystems to Fight Poverty Cite as: World Resources Institute (WRI) in collaboration with United Nations Development Programme, United Nations Environment Programme, and World Bank. 2005. World Resources 2005: The Wealth of the Poor—Managing Ecosystems to Fight Poverty. Washington, DC: WRI. Published by World Resources Institute 10 G Street, NE Suite 800 Washington, DC 20002 © 2005 World Resources Institute The World Resources Series is produced collaboratively by four organizations: the United Nations Development Programme, the United Nations Environment Programme, the World Bank, and the World Resources Institute. The views expressed in this volume are those of the contributors and do not necessarily reflect the judgments of the organizations’ boards of directors or member governments. The full report is available online at www.wri.org. Materials may be reproduced with the written permission of the World Resources Institute. ISBN 1-56973-582-4 IV WORLD RESOURCES 2005 CONTENTS Foreword vii PART I THE WEALTH OF THE POOR CHAPTER 1 NATURE, POWER, AND POVERTY 3 ■ Linking Ecosystems, Governance, and Poverty 4 ■ The Persistence of Poverty 5 ■ Growth Alone Is Not Enough 11 ■ Environment Matters to the Poor 12 ■ Nature as an Economic Stepping Stone 16 ■ Better Governance Is Vital for Higher Incomes 19 ■ The Environment as a Route to Democratic Governance 25 ■ Linking Environment and Governance in the Global Poverty Fight 26 ■ From Vulnerability to Wealth 27 CHAPTER 2 ECOSYSTEMS AND THE LIVELIHOODS OF THE POOR 33 ■ How Important is Environmental Income? 34 ■ Common Pool Resources as a Source of Enviromental Income 39 ■ Who Gets More Environmental Income: Rich or Poor? 41 ■ Environmental Income by Ecosystem 45 ■ The Role of Livestock 50 ■ The Social Benefits of Ecosystems 51 ■ Building on the Strength of Ecosystems 52 CHAPTER 3 THE ROLE OF GOVERNANCE 55 ■ Resource Tenure and Property Rights: Access and Ownership 56 ■ Decentralization: Can It Help the Poor? 62 ■ The Rights to Information, Participation, and Justice: The Importance of a Voice 70 CHAPTER 4 FOUR STEPS TO GREATER ENVIRONMENTAL INCOME 79 1 More Income Through Better Ecosystem Management 80 ■ Better Management Requires an Ecosystem Approach 80 ■ Income Benefits of Better Management 81 2 Getting the Governance Right: Empowering the Poor to Profit from Nature 83 ■ Securing Property and Resource Rights through Tenure Reform 83 ■ Poor-Friendly Decentralization: Community-Based Natural Resource Management 87 ■ Keeping Community-Based Management Pro-Poor 89 ■ A Continuing Role for the State 92 3 Commercializing Ecosystem Goods and Services 97 ■ Provide Marketing Assistance 97 ■ Understand the Limitations of Transportation 98 ■ Make Credit Available 98 WORLD RESOURCES 2005 ■ Capture Greater Value 99 ■ Partner with the Private Sector 101 ■ Keep Sustainability in Mind 105 4 Augmenting Nature’s Income Stream: Payment for Environmental Services 105 ■ The Challenges of Pro-Poor PES 108 Beyond Environmental Income 109 CHAPTER 5 TURNING NATURAL ASSETS INTO WEALTH: CASE STUDIES 113 ■ Nature in Local Hands: The Case for Namibia’s Conservancies 114 ■ More Water, More Wealth in Darewadi Village 124 ■ Regenerating Woodlands: Tanzania’s HASHI Project. 131 ■ Bearing Witness: Empowering Indonesian Communities to Fight Illegal Logging 139 ■ Village by Village: Recovering Fiji’s Coastal Fisheries 144 SPECIAL SECTION GLOBAL DEVELOPMENT POLICIES: MAKING MDGs AND PRSPs WORK FOR THE POOR AND THE ENVIRONMENT 153 The Millennium Development Goals 154 ■ A Break from the Past 154 ■ For Environment and Governance, More of the Same 154 ■ Focused on the Wrong Nature 154 ■ Getting the Targets and Indicators Right 157 ■ Encouraging Environment and Governance as Cross-Cutting Themes 160 Poverty Reduction Strategies (PRSPs) 162 ■ Also in Need of an Environmental Overhaul 162 ■“Mainstreaming” the Environment in PRSPs: The Unfulfilled Promise 163 ■ Upgrading the Treatment of Environmental Income in PRSPs 165 ■ Steps toward More Effective PRSPs 170 PART II DATA TABLES 1 Population and Education 176 2 Human Health 180 3 Gender and Development 184 4 Income and Poverty 188 5 Economics and Financial Flows 192 6 Institutions and Governance 196 7 Energy 200 8 Climate and Atmosphere 204 9 Water Resources and Fisheries 208 10 Biodiversity 212 11 Land Use and Human Settlements 216 12Food and Agriculture 220 Acknowledgments 227 References 230 Index 246 vi FOREWORD MAKING THE WEALTH OF NATURE WORK FOR THE POOR PROFOUND POVERTY IS A FUNDAMENTAL OBSTACLE TO THE dreams and aspirations of people in every nation. Even after five decades of effort to support development and growth, the dimensions of poverty still stagger us. Almost half the world’s population lives on less than $2 per day; more than a billion live on $1 or less. Poverty at this scale ripples beyond the boundaries of any particular country or region and affects the well- being of us all. The publication of World Resources 2005 comes at a particularly critical time. Economies in many developing countries have been growing at a rapid pace for several years. That growth has made us aware of two stark realities: in the largest of those countries it has lifted millions out of extreme poverty; but the price these nations are paying in accelerated degra- dation of their natural resources is alarming. At the same time, there have been a number of key events this year, 2005, that provide a clearer focus on the future. At the G-8 Summit in Scotland, attention to the problems of global poverty, especially in Africa, was unusual for its single-mindedness and for the acknowledgment of poverty’s far-reaching consequences. WORLD RESOURCES 2005 In the spring of this year, the Millennium Ecosystem Assessment human well-being. However, the gains are unevenly distributed, (MA), an international appraisal of the health of the world’s and the poor have more often borne the associated costs. ecosystems, published the first of its series of reports after five years of intensive study. The MA findings sound an alarm bell As populations and economies grow, the pressures on ecosystems for the future, but they also contain within them a framework to will inexorably increase. Yet thanks to the MA, we finally under- address the challenges we have created for ourselves. stand, in terms even the most hard-bitten economist or banker can appreciate, the economic value of our natural capital The MA has shown beyond any question the degradation we account. And like the banker or economist, we now understand have caused to the ecosystems of the earth. At the same time, the that we must manage that capital account—a trust fund, if you MA has demonstrated unequivocally that we can better manage will—so that it not only provides for our needs today but