NATURAL CAPITAL ACCOUNTING (NCA): MADAGASCAR Conference on the Gaborone Declaration for Sustainability in Africa, Gaborone, Botswana, 7-8 October 2013
Initiating NCA in Madagascar Strong interest and commitment from the Government of Madagascar Endorsement of Gaborone Declaration Cabinet approval to join WAVES Partnership WAVES National Steering Committee establishment Recruitment of national WAVES coordinator Co-financing of US$0.5 million Detailed and participative scoping exercise involving Government, civil society & donors to reach consensus on priorities Development of agreed Context, Vision and Objectives for WAVES Madagascar
The context why are we doing this? Natural capital represents the largest proportion of Madagascar s total wealth (> 50%) The value of natural capital can be increased by public policies for efficient management The transformation of natural capital into other forms of capital can also increase the national wealth if the transformation is managed well The policy framework should therefore reflect: (i) an understanding of the value of natural capital; (ii) measures that aim to increase the value of this capital; and (iii) approaches to capture, reinvestment and distribution of resource rents.
Vision and Objectives Vision: Public and private sector discourse and decisions related to development policies are based on an understanding of the true physical and economic value of natural capital Objectives: To generate information on the value of natural capital so as to inform decision making and the policy framework in Madagascar and, in so doing, to provide an example of good practice in policy making to the region and globally
Process for WAVES Madagascar 1. Policy questions & entry points Review of documented strategy / policy / legislation Emerging issues and problems 2. Identification of accounts Stock and / or flow accounts? Physical and /or monetary accounts? Sector and national indicators 3. Data collection plans Identification of data needs Data inventory & gap analysis Data collection and/or estimation methods 4. Account preparation Collection / estimation of missing data Account compilation Indicator development 5. Policy use Diffusion of accounts and indicators Awareness raising Technical support to illustrate use in policy development WE ARE HERE
WAVES Madagascar workplan Based on brainstorming of documented and emerging policy questions, NCA focuses on three natural resource sectors and macro-economic indicator development 4 year, US$2 million workplan was developed to implement NCA activities Water resources accounts Mining sector accounts Macroeconomic indicators Forestry / protected area accounts
Institutional set-up
Mining Sector Policy questions Priority accounts Secondary accounts (based upon data availability) Challenges Growth of contribution of mining sector in Madagascar to economic development Equitable sharing of benefits of mining revenues Balance between development of the mining sector and environmental management Physical and monetary stock accounts for industrial mining by large scale enterprises (nickel, cobalt, chrome, mineral sands, coal etc.) Physical and monetary stock accounts for precious stones and gold Limited data is collected by the national statistics agency on mining activity Large companies hesitant to share information because of confidentiality concerns Most precious stone and gold mining informal, small scale or illegal and data hard to come by but very important for sector and economy
Forestry Sector Policy questions Priority accounts Secondary accounts (based upon data availability) Challenges Contribution of the forestry sector to national wealth Satisfaction of needs in terms of environmental goods and services Sustainable financing of the protected area network Physical and monetary stock accounts for timber in non-protected forests Physical accounts for protected areas Monetary accounts for selected services provided by protected areas (e.g. tourism, carbon?) Data is abundant but very dispersed and incoherent both spatially and temporally Much of the timber exploitation activity in the sector is informal or illegal Methods for accounting of monetary values of protected area services are in their infancy
Water Resources Sector Policy questions Priority accounts Secondary accounts (based upon data availability) Challenges Efficient management of water i.e. the balance between the availability and use of water resources Physical flow accounts for water resources in Madagascar s northern river basin Physical stock accounts for renewed water resources in Madagascar s northern river basin Replication of accounts in other river basins Compromise between geographical scale and level of detail in the accounts and thus their use for policy purposes Need to rely on hydrological modeling for stock accounts => questions of accuracy because of input data quality Widely dispersed data sources between different Government ministries, NGOs and private sector
Macro-economic Indicators Policy questions Priority indicators Secondary indicators (based upon data availability in SNA) Challenges Contribution of natural capital to total wealth Is natural capital being sustainably used? How can the total wealth of the country be managed in an integrated manner Natural wealth (mining and forestry) Volume index of depletion of natural capital (mining and forestry) Adjusted net savings Need to facilitate shift in thinking of Government from traditional development planning concepts to managing the different components of the country s total wealth in an integrated manner Communications and awareness raising challenge Quality of country s national accounts
Experiences & Lessons Government needs to be in the driver s seat need clear commitments to dedicate the needed resources and to use the results The process itself can be an important trigger for discussions on approaches to national development planning Accounts are only useful when they are needed to answer policy questions A modest approach is recommended
Experiences & Lessons Spend time getting the institutional set-up right Find ways to reinforce the essential role of the national statistics agency in NCA Manage expectations from the beginning Don t be afraid to try (and fail) new methodological approaches
Experiences & Lessons Data will always be a challenge so don t give up Always keep the future sustainability of the process in mind Benefit from opportunities to network regionally and internationally COMMUNICATE, COMMUNICATE, COMMUNICATE!