Capturing Natural Capital Value in Rwanda

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GGKP News
10 December 2019
Rwanda has been an environmental champion for its efforts to ban plastic bags and expand national forest cover. It has also established the Rwanda Green Fund to make the country greener and climate compatible, and has enshrined green growth strategy and sustainable development goals within its National Strategy for Transformation and Green Growth and Climate Resilience Strategy. Despite its many achievements, Rwanda is still experiencing major land use changes that are having an impact on its economy and environment.
 
To address this issue, a pilot project – Achieving green growth through terrestrial natural capital restoration in Rwanda – was officially launched in Kigali at a workshop on 10 December. The goal of the project is to underpin the central role of natural capital in macro-economic output and to facilitate improved decision-making in green growth policies and to achieve national SDG targets. 
 
The project is supported by a joint effort between the Green Growth Knowledge Partnership (GGKP) and GIZ’s Economics of Land Degradation (ELD) initiative, and is being led by the Clean Energy and Sustainability Analytics Center (CESAC) of Montclair State University in the United States, together with two national experts in the field of conservation science and environmental economics in addition to an international team of experts. A similar project to protect and restore terrestrial ecosystems is underway in Kyrgyzstan. 
 
Project lead Dr. Pankaj Lal, Director of CESAC, introduced the project at the workshop as well as the innovative methodology being used – the Integrated Economic-Environmental Modelling (IEEM) platform. 
 
“The strength of this platform in analysing the impact of public policies is the integration of wealth and natural capital assets in addition to the standard economic indicators such as GDP, income and employment,” he said.
 
Peter Katanisa, National Coordinator of the Wealth Accounting and the Valuation of Ecosystem Services (WAVES) Programme at the World Bank, welcomed the project launch and expressed hope that it could help Rwanda integrate the non-marketed value of ecosystem services and national capital accounting in the national macroeconomic framework. 
 
“The government could make an informed decision if the project could demonstrate the monetary value of loss in natural capital through land degradation, such as soil erosion, which would overall lead to green growth of the country,” he said.
 
Participants also discussed how the project could identify and address key policy questions according to the country’s priorities and goals towards green growth through sustainable use of land and land restoration. Based on on-going strategies, three potential sectors for the policy scenario assessment were suggested: renewable energy, particularly biomass use; agriculture; and forestry. 
 
Identification of key policy scenarios will be finalized in January 2020. The project team will then run the ecosystem service models and conduct scenario assessments to calculate net present value and internal rate of return of each scenario. This will in turn help inform decisions pertaining to changes in the terrestrial natural capital and respective ecosystem service flows by comparing the impacts of business-as-usual and restoration interventions.  
 
The pilot project is expected to present its results by the end of April 2020. The results will be validated and presented to key stakeholders in Kigali together with training sessions for buy-in and scale-up of the project methodology. 
 
“This grounding in rigorous economics will generate a strong business case for investment in reverting land degradation in the Rwanda, which eventually provide a model for other countries to follow,” Dr. Lal said.
 
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About the GGKP Natural Capital Expert Working Group
 
The GGKP Working Group on Natural Capital explores state-of-the-art methods, models, data and tools to achieve its three goals of pushing forward the knowledge frontier around natural capital and green growth; mainstreaming natural capital in global green growth activities; and supporting stronger implementation of natural capital commitments in national economic plans. The group is comprised of 24 experts from across GGKP’s partner institutions, each with at least 10 years of experience working with natural capital. For more information, see About the Natural Capital Working Group. 

 

About the Economics of Land Degradation (ELD) Initiative 

The Economics of Land Degradation (ELD) Initiative aims to transform global understanding of the economic value of productive land based on both market and non-market values, and to improve stakeholder awareness for socioeconomic arguments to improve sustainable land management, prevent the loss of natural capital, preserve ecosystem services, combat climate change, and address food, energy, and water security.

 

Themes: 
Natural Capital
Countries: 
Rwanda