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Ecological Limits

China and India’s GDP will be hit hardest by global food price shock

By | Ecological Limits, Uncategorized | No Comments

Report published by UNEP and Global Footprint Network ranks countries on the economic risks they face from a hike in food prices

(London 18 May 2016) – If global food prices double then China could lose $161 billion in GDP and India could lose $49 billion, according to a new report released today by the United Nations Environment Programme (UNEP) and Global Footprint Network.

The UNEP-Global Footprint Network report, entitled ERISC Phase II: How food prices link environmental constraints to sovereign credit risk, features a table that ranks countries according to how badly they will be affected if global food commodity prices double.

In the future, the world will likely suffer from higher and more volatile food prices as a result of a growing imbalance between the supply and demand of food, the report notes. Rising populations and incomes will intensify the demand for food while climate change and resource scarcity will disrupt food production.

The report, which was published in collaboration with Cambridge Econometrics and several leading financial institutions, models the impact of a global food price shock on 110 countries to assess which countries face the greatest economic risk from this growing imbalance.

In terms of the highest percentage loss to GDP, the five countries that will be worst hit if food commodity prices double are all in Africa – Benin, Nigeria, Cote d’Ivoire, Senegal and Ghana. But China will see the most amount of money wiped from its GDP of any country – $161 billion, equivalent to the total GDP of New Zealand. India will see the second highest loss to GDP – $49 billion, equivalent to the total GDP of Croatia.

Among the report’s other key findings are:

  • Overall, Egypt, Morocco and Philippines could suffer the most from a doubling of food prices in terms of the combined impact on GDP, current account balance and inflation.
  • 17 out of the 20 countries most at risk from a food price shock are in Africa.
  • Paraguay, Uruguay, Brazil, Australia, Canada and the US would benefit the most from a sharp increase in food commodity prices.
  • Globally, negative effects of a food price shock massively outweigh positive effects in absolute terms. While China could see an absolute reduction in GDP of $161 billion, the highest absolute positive effect on GDP, seen in the United States, is only $3 billion –50 times smaller than the impact on China.
  • In 23 countries, a doubling in food prices leads to a 10 per cent (or more) rise in the consumer price index.
  • Countries with higher sovereign credit ratings tend to be less exposed to risks resulting from a food price spike.
  • Countries whose populations have the highest consumption of natural resources and services, and are therefore most responsible for the environmental constraints that make future food prices higher and more volatile, tend to face the lowest risk exposure.

UNEP Executive Director Achim Steiner said, “Fluctuations in food prices are felt directly by consumers and reverberate throughout national economies. As environmental pressures mount, it is important to anticipate the economic impact of these stresses so that countries and investors can work on mitigating and minimizing risk. And as the global population continues to rise, food prices can be a bellwether for how environmental risk translates to economic risk and vulnerability.”

Susan Burns, co-founder of Global Footprint Network and director of its Finance Initiative, said: “Now more than ever, in this era of climate change, identifying all relevant environmental risks is crucial to investing not only in equities but also sovereign bonds.

“As this latest research shows, disruptions to our food system represent one substantial environmental risk that both investors and governments may be largely overlooking but would be well-served to integrate into their risk analysis.”

The ERISC Phase II report was published in collaboration with Cambridge Econometrics and several financial institutions: Caisse des Dépôts, First State Investments, HSBC, Kempen Capital Management, KfW, and S&P Global Ratings.

The report builds on the first Environment Risk Integration in Sovereign Credit (ERISC) report published in 2012 by UNEP FI and GFN.

The overall objective of the ERISC project is to assesses how environmental risks such as deforestation, climate change and water scarcity affect economies, given that GDP, inflation and current account balances underpin some of the criteria that determine a country’s sovereign credit rating and the cost of borrowing on international capital markets.

UNEP and GFN would like to invite interested parties, governments, banks, investors and rating agencies to work with them to further decipher the link between environmental constraints and sovereign credit risk.

Today’s ERISC report comes ahead of the release of a landmark report on food systems and natural resources written by the International Resource Panel (IRP), a consortium of 34 internationally renowned scientists, over 30 national governments and other groups hosted by UNEP.

The IRP report, which lists a series of solutions that will improve the world’s food system, will be released in Nairobi on 25 May at the United Nations Environment Assembly – the world’s de facto Parliament for the Environment.

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About Global Footprint Network
Global Footprint Network is an international research organization that is changing how the world manages its natural resources and responds to climate change. Since 2003 Global Footprint Network has engaged with more than 50 nations, 30 cities, and 70 global partners to deliver scientific insights that have driven high-impact policy and investment decisions. Global Footprint Network’s finance initiative helps financial institutions quantify and integrate environmental risk in their investments, credit ratings, and country risk analysis.
www.footprintnetwork.org
www.footprintfinance.org

About UNEP Finance Initiative
The United Nations Environment Programme Finance Initiative (UNEP FI) is a unique global partnership between the United Nations Environment Programme (UNEP) and the global financial sector. UNEP FI works closely with over 200 financial institutions who are Signatories to the UNEP FI Statements, and a range of partner organizations to develop and promote linkages between sustainability and financial performance. Through peer-to-peer networks, research and training, UNEP FI carries out its mission to identify, promote, and realise the adoption of best environmental and sustainability practice at all levels of financial institution operations.
www.unepfi.org

Media Contacts:
Ronna Kelly (USA but in London 12 May – 19 May)
Director of Communications
Global Footprint Network
ronna.kelly@footprintnetwork.org
+1-510-839-8879
Skype: ronna.kelly.gfn

Shereen Zorba
Head of News and Media
UNEP
shereen.zorba@unep.org
+254-20 762 5022

Celebrating Trees on Earth Day

By | Carbon Footprint, Ecological Limits | No Comments

Together with our partner Earth Day Network, we’re happy to give trees a special nod today.

At Global Footprint Network, we have a soft spot for trees and forests. They are an essential pool of biodiversity. And they are one of our most important ecological assets: A whopping 70 percent of humanity’s Ecological Footprint is comprised of demand for forest products (paper, timber, etc.) and carbon capture, an ecological service that forests provide.

In fact, even if the whole Earth were covered with forests, we still wouldn’t have enough to meet our current demand for their products and services…Besides, we obviously need to leave some productive land available for crops to feed us.

Overall, total forest biocapacity worldwide has declined by 5 percent since 1961, the earliest year reliable data is available. On a per-person basis, the decline is much greater, at 59 percent.

Brazil, Russia, the United States and Canada are the countries with the most forested land in the world today. Combined, they generate 54 percent of the renewable goods and services that all forests provide globally.

Protecting, restoring and maintaining forests is a significant responsibility of governments not just for the sake of their people, but for the world at large, as greenhouse gas emissions know no borders.

Of the top five countries with the highest forest biocapacity in the world, China has shown the most remarkable trend reversal, followed by the United States.

Planting trees is an important, wonderful mission to pursue. But at least as important is focusing on reducing the demand we put on forests. First and foremost: carbon sequestration. Because we produce more carbon than our forests can absorb, it accumulates in the atmosphere and contributes to climate change. Since we can never plant enough trees to mitigate climate change, the path is clear: we need to reduce our carbon emissions. Click here for more information and graphs about the status of forests around the world.

From outdoor party to environmental awareness, a student’s view of Earth Hour in China

By | Ecological Limits, Personal Footprint | No Comments

When I was growing up in Shenzhen, China, one of the must-join activities in my high school was the “Earth Hour” performance. On the last Saturday in March, companies, government, and environmental organizations run by high school students organized performances and games using only small lights (rather than bright stage lighting) in large communities to encourage residents to join outdoor activities while turning off their lights at home. One performance that I remember most was a student band and chorus performing in the dark, without any lights at all. In that darkness, we seemed to be able to hear the music more clearly and enjoy it more.

To this day, about half of the lights are turned off in government buildings and public areas—on streets and in squares—in Shenzhen to support Earth Hour. Words such as “1 Hour,” “60 Minutes,”’ and “3600 Seconds” spelled out with LED lights can be seen everywhere in the city.

As a high school student seven years ago, I perceived Earth Hour more as an outdoor party than a significant effort to protect our planet. As a young professional today,

, I have come to recognize that in one hour of darkness, we are doing more than just turning off lights. Empowered by knowledge of the Ecological Footprint from my studies at UC Berkeley and work at Global Footprint Network, I now consider Earth Hour as a great opportunity for everyone to review our relationship with the entire ecosystem and at the same time raise environmental consciousness.

The human population worldwide is using 1.6 times more natural resources and services—fruits and vegetables, meat, fish, wood, cotton for clothing—than our planet can regenerate in a year, according to Global Footprint Network’s calculations. If we translate this data to Earth Hour, it means that the natural resources and services that our planet can regenerate in one hour will be used after 37 minutes.

This year, I will be nearly 7,000 miles away from my hometown in China on Earth Hour, but I still plan to participate. My plan: Climb the Berkeley Hills to overlook the San Francisco Bay Area in the dark! I also will encourage everyone I know to participate in Earth Hour, no matter where they are, to reduce energy consumption and give a one-hour break to our beautiful planet’s ecosystems.

Krina Huang graduated from UC Berkeley with degrees in Environmental Economics and Policy and in Political Economy. After working at Global Footprint Network as an intern earlier this year, she joined our staff as a research assistant to support our new initiatives in China.

The National Footprint Accounts 2016 are out! Carbon makes up 60 percent of the world’s Ecological Footprint

By | Carbon Footprint, Ecological Limits, Footprint for Government, Personal Footprint | No Comments

Global Footprint Network launches its 2016 edition of the National Footprint Accounts today, featuring a refined carbon Footprint calculation.

The updated calculation has revealed that the global carbon Footprint is 16 percent higher than previously calculated, with a consequent 8 percent increase in the global Ecological Footprint. The carbon Footprint makes up 60 percent of the world’s Ecological Footprint.

We are happy to make the National Footprint Accounts available in a free downloadable version for research, education and non-commercial purposes (scroll down for more details). An interactive map and country rankings based on the National Footprint Accounts 2016 are available at www.footprintnetwork.org/maps. Watch a video explaining the National Footprint Accounts here. If you are interested in attending a webinar on the Footprint Accounts, please email media@footprintnetwork.org.

The annual maintenance of the National Footprint Accounts involves incorporating the most recent data (2012) from the United Nations Food and Agriculture Organization (FAO), United Nations Comtrade database, the International Energy Agency (IEA), and other sources.

Carbon Update

As mentioned above, we have made a number of improvements to the accounting methodology this year. The most influential is the new calculation of Average Forest Carbon Sequestration (AFCS) value — which is the long-term capacity for one hectare of world-average forest ecosystem to sequester carbon dioxide. By including new data sources and accounting for multiple forest categories, global wildfires, and forest ecosystem emissions from soil and harvested wood products, forests were found to provide less net-sequestration of carbon than previously calculated.

The Ecological Footprints of countries are impacted by the new methodology. The higher a country’s carbon Footprint as a percentage of its overall Ecological Footprint, the bigger the increase in its Footprint compared to last year’s edition. For instance, Oman, whose carbon Footprint makes up a whopping 77 percent of its Ecological Footprint, has jumped up over 20 places in the ranking of countries that demand more than their own ecosystems can renew. (Oman is now one of the top 15 countries by ecological deficit.) On the other hand, Ethiopia, whose carbon Footprint is a mere 7 percent of its Ecological Footprint, fell 16 slots down the same ranking.

The robust carbon Footprint calculations are especially timely in light of the historic Paris Agreement signed in December 2015 by 195 nations and the European Union. The adopted goal of restricting average temperature increases to 2 degrees Celsius above pre-Industrial Revolution levels translates into a specific upper carbon budget for all future emissions of 800 gigatonnes CO2. The Paris Agreement also shifts the focus to net emissions of countries, recognizing the importance of land-use choices for carbon sequestration. In this context, Ecological Footprint accounts — which measure both emissions on the demand side and the supply of sequestration on the biocapacity side — provide a natural framework to evaluate net emissions by countries and the interaction between competing demands on a country’s land.

Beyond carbon, looking at the world through the prism of the Ecological Footprint makes for interesting insights, revealing long-term trends and impacts regarding countries’ ecological wealth, economic health and population growth. Here are a few highlights:

  • PIGS countries (Portugal, Italy, Greece, Spain) have been registering a steady decline of their Ecological Footprint per capita since the mid-2000s. By contrast, strong European economies like Germany and France have seen a rebound of their Ecological Footprint per capita since the 2008 financial crisis. What would it take for the PIGS countries to strengthen their economy AND reduce their Ecological Footprint?

Asian countries with rapid economic expansion, such as India, China, South Korea and Vietnam, are displaying a strong increase of their Ecological Footprint per capita that is concomitant with their rising standards of living.

Note that Vietnam and Cambodia stand out among Asian countries for their successful efforts building up their biocapacity per person to support their growing Ecological Footprint.

Low-income countries with surging population growth (fast-increasing demand) or violent turmoil (collapse of agricultural activity and output) — including Honduras, Niger and Somalia — are hitting the threshold of their own ecosystems’ ability to support (biocapacity) their population’s demand (Ecological Footprint.)

Curious to explore more? Download our Public Data Package! 

Global Footprint Network is offering a free downloadable version of its National Footprint Accounts for research, education and non-commercial purposes, at www.footprintnetwork.org/public. This Public Data Package includes the latest results for all countries, country graphics and the number of Earths required if the world’s population lived like the average citizen of each country. The free download also offers many new ways to sort data — by region, GDP, Human Development Index and other categories — and data quality scores for the results.

About the National Footprint Accounts  

Global Footprint Network’s annual update of the National Footprint Accounts tracks the balance sheet of approximately 200 nations from year to year, based on nearly 200,000 data points per country per year from over 30 sources. The accounts add together a country’s annual demand for the natural resources and ecological services our planet’s lands and seas provide — fruits and vegetables, meat, fish, wood, cotton for clothing, timber and carbon dioxide absorption. This demand, the Ecological Footprint, then can be compared to the supply of these goods and services provided by that country’s ecosystems, called biocapacity.

In 1961, the first year for which consistent data sets are available, our planet was able to supply 37 percent more resources and services than humanity demanded. Since then, the global ecological deficit — the amount by which humanity’s demand has exceeded nature’s budget — has widened substantially. The 2016 edition of the National Footprint Accounts shows that the world population demands 64 percent more than what nature can regenerate in one year through overfishing, over-harvesting our forests and, primarily, emitting more carbon dioxide than our ecosystems can absorb. The effects include wildlife habitat loss and fragmentation, collapsing fisheries, and climate change.

More information about the new carbon calculation in the National Footprint Accounts can be found in the peer-reviewed Ecological Indicators article Ecological Footprint: Refining the carbon Footprint calculation.

For licensing questions about the National Footprint Accounts, contact data@footprintnetwork.org.

Making a Difference: From the Arctic to China

By | Carbon Footprint, Ecological Limits | No Comments

I had two passions as a kid: nature and technology. After starting as an electrical engineering and computer science undergraduate at University of California at Los Angeles (UCLA), I realized my path lay elsewhere.

Long before I joined Global Footprint Network as Lead Researcher, my passion for nature led me to Alaska and Russia where, as a Ph.D. student at the University of Texas, I used cutting edge technologies to survey three dozen ecosystems to evaluate how global warming is changing landscapes in the Arctic.

Growing up in Orange County, California, it quickly became apparent to me that an emphasis on material wealth was keeping many of us disconnected from fundamental aspects of our life on Earth, starting with the natural ecosystems we depend on.

I ached to have a direct impact on those issues I had come to care deeply about, in no small part through living and working with the communities I encountered near the Arctic Circle and in the desert along the Mexican border. Following my doctorate and post-doc research, I joined Global Footprint Network.

I feel incredibly lucky and privileged to play a part in raising awareness about natural resource constraints in the public and among decision-makers. So much work has been done, yet there are still so many promising paths we can explore to make the Ecological Footprint increasingly relevant to communities around the world.

I am especially excited by the great opportunity that has been steadily growing in China. The concept of the Ecological Footprint resonates well with Chinese vision for creating a modern Ecological Civilization. Guizhou, a small, mountainous, biodiversity-rich province, where urban development, transportation and agriculture are challenging, is aiming to become an Eco-Civilization poster child with the help of the Swiss government.

We’re collaborating closely with the province’s Environmental Protection Department to help leaders along that path. Our next goal is to provide standards that all of China’s provinces can use and share in order to compare results.

You can support sustainability work in China and around the world by donating here. Your contribution could help Guizhou, China’s poorest province, set a precedent and show the rest of the world that it is possible to live well within the means of nature. Your support also could make a difference for impoverished communities everywhere who are beginning to envision their own sustainable future, with our help.

Thank you so much for your continued commitment to Global Footprint Network’s work around the world.

– See more at: http://www.footprintnetwork.org/en/index.php/GFN/blog/from_the_arctic_to_china_making_a_difference#sthash.aukx82Yt.dpuf

The Growing Reach of Beijing’s Food Ecological Footprint

By | Ecological Limits, Footprint for Government | No Comments

Xie Gaodi from the Institute of Geographic Sciences and Natural Resources Research (IGSNRR) at the Chinese Academy of Sciences is the lead author of a recent research paper published in the journal Sustainability. He recently talked with Global Footprint Network about the unsustainability of giant cities.

Between 2008 and 2012, the population of Beijing climbed from 23 million to more than 30 million—a whopping 30 percent in just four years. One direct impact of this rapid demographic surge, which includes permanent residents and “floating” population such as tourists, was the drastic increase in Beijing’s reliance on food produced in areas located outside of, and increasingly further out from, the city’s boundaries, stresses a new article in the journal Sustainability authored by several researchers in China. The challenge caused by Beijing’s insufficient agricultural resources was compounded by high land prices, the researchers pointed out.

Over those five years, Beijing’s dependence on non-local food supplies grew from 48 percent to 64 percent of total food consumption in the metropolitan area, according to the article, “The Outward Extension of an Ecological Footprint in City Expansion: The Case of Beijing.”

The authors introduce the notion of Ecological Footprint distance (abbreviated as Def) to reveal the average distance that natural resources required to support a population’s Ecological Footprint travel to reach that population.

Researchers stressed that food accounts for the significantly biggest part of Beijing’s consumed biocapacity in terms of weight.

Because of challenges collecting data, the researchers chose to focus on food resources (vegetables, fruit, meat, eggs, fish, grain and oil) produced within China. And they exclusively used geographic data from Beijing’s giant food wholesale market Xinfadi, which makes up more than two-thirds of Beijing’s overall food market—hence deemed representative by the researchers.

That partial lens led them to conclude that Beijing’s Def grew from 567 kilometers in 2008 to 677 kilometers in 2012, with an average annual increase of about 25 kilometers. Beijing’s Ecological Footprint distance in winter and spring was much higher than in summer and fall. This was to due to the seasonal variations that increased food production capacity in the warmer months of the year in areas closer to the capital.

Lead author Xie Gaodi, from the Institute of Geographic Sciences and Natural Resources Research, Chinese Academy of Sciences, kindly agreed to an interview about the recent article. He answered our questions via email.

How did you start working with the Ecological Footprint?

Xie Gaodi: In 1997 I began focusing my research on natural resources and sustainable development in China. We started looking for indicators which could effectively show us the actual sustainability status of local development. Several papers written by Mathis Wackernagel and William Rees et al. came to our attention, such as “Our Ecological Footprint: Reducing Human Impact on the Earth” (1996) and “Perceptual and structural barriers to investing in natural capital: Economics from an Ecological Footprint perspective” (1997).

These papers spurred my interest in the Ecological Footprint. I made up my mind early on that the EF is a good tool to analyze sustainability. Every other year or so, my team, together with Global Footprint Network and WWF, compile China’s Ecological Footprint Report. The Ecological Footprint is now a well-known tool not only in Chinese academia but also throughout China.

Your research paper seeks to evaluate the geographic reach that is required for Beijing to access the biocapacity it needs to feed its population. What was your ultimate goal?

XG: In the last 30 years, China has been pushing through a fast urbanization process. In just the most recent years, several mega-cities have sprouted as more and more people have been moving away from rural areas to find work. Some cities such as Beijing and Shanghai, with over 20 million residents, are getting so huge that I worry about their sustainability. Their Ecological Footprint clearly extends way beyond their own biocapacity.

My goal with this research has been to show how far a big city’s EF or biocapacity extends, starting with Beijing. The conclusion from our findings is clear: China ought to favor the development of small or medium-sized cities because they are more sustainable.

What does Def actually indicate/infer with regard to sustainability?

XG: The further Def climbs up and away from biocapacity, the less safe it is. Food safety is compromised when food travels from far away, becoming vulnerable to such factors as weather events. Long travel distances also affect the quality of food, including its nutritional value. Besides, a food ecosystem that depends on so much transportation is the source of a whole set of environmental issues — including carbon emissions.

Typically Global Footprint Network refers to “imports” as resources from other countries. Your paper defines them as coming from outside the boundaries of Beijing but from Chinese sources of production. What about true foreign imports from outside China?

XG: Beijing’s “imported” biocapacity should include both food imports from China and from abroad. The challenge we’re facing is the difficulty to get enough reliable data about foreign food imports in such a huge city as Beijing. My guess is that they make up between 10 and 20 percent of the biocapacity consumed in Beijing — but that’s just a guess at this stage.

So we just calculated the Def of “imported” biocapacity within China, but we will calculate the Def  of imported biocapacity from foreign sources as soon as we are able to.

Based on your research, what does “sustainable development in metropolitan areas” look like to you? What policies do you suggest would pave the way in that direction?

XG: In my view, “sustainable development in metropolitan areas” is attained when the population can access the necessary resources to support its Ecological Footprint and need for ecosystem services, thanks to biocapacity that originates close enough so as to spare residents undue environmental pollution and worry about their food safety.

This can be achieved through such policies as:
1. Careful land use that rationally plans population density and natural assets’ availability across that land.
2. Ensuring the closest possible proximity of available biocapacity.
3. Reducing the transportation of resources.

The governments of some big cities such as Beijing and Shanghai have truly realized that their city has grown too large. They have even begun to take some measures to limit or control urban growth. But at the national level, debates are still ongoing as to whether urban planning should favor small- and medium-sized cities.

Statement on U.S.-China Climate Agreement

By | Ecological Limits, Footprint for Finance, Footprint for Government | No Comments

Statement by Mathis Wackernagel, President, Global Footprint Network

The landmark U.S.-China climate change agreement announced this week is a game changer for our energy future because it represents strong recognition of the need to wind down fossil fuel use to zero within a few decades. What had been a physical necessity but a political taboo is now being acknowledged by the two countries with the largest CO2 emissions.

Other countries have been waiting on the sidelines for the United States and China to act on climate change. So President Barack Obama and President Xi Jinping’s commitment to reduce greenhouse gas emissions and boost renewable energy adoption by 2025 and 2030 respectively—just 10 and 15 years away—sends a promising signal to the world community on the path to the Paris climate summit at the end of next year.

The new goals would keep the United States on the trajectory to achieve deep economy-wide carbon emission reductions on the order of 80 percent by 2050, according to the White House. China, meanwhile, has targeted total energy consumption coming from zero-emission sources to around 20 percent by 2030. Both actions will happen well within the lifetimes of many people today.

These targets represent a significant shift in political momentum and  suggest that moving out of fossil fuels may finally have won mainstream acceptance.

Of course, it will take significant investment for nations to transform their economies, and those costs are only likely to increase the longer nations delay in taking action. Consequently, it’s in the self-interest of every nation to act now to shift toward low-carbon policies as a way to “future proof” its economy.

Our analysis  shows that countries are unequally exposed in terms of the scale and impact of reforms required to move to low-carbon economies. The longer countries wait, the more their  carbon intensive assets will lose value  in a low-carbon future. This inaction may lead both to a loss of competitiveness and potentially even a higher credit default risk. We are working with the U.N. Environment Programme Finance Initiative (UNEP FI) and leading finance institutions to develop tools for the finance industry to better measure these economic risks when evaluating sovereign bonds.

To succeed, government leaders at all levels need better tools to make economically effective long-term decisions on everything from infrastructure to energy provision to buildings.  Consequently, we have worked with state leaders in the U.S. to enhance traditional net present value (NPV) tools that recognize the economic and resource context in which the investments will operate. Such assessments provide more realistic estimates of the future costs and benefits associated with particular investments and show that in many cases, the low-carbon options are already today the economically superior choice.

Indeed, the U.S.-China agreement announced Wednesday suggests we need an entirely new way to determine the value of fossil fuels and assets that could become stranded because of their overdependence on those fuels.

The details of how U.S. and China will achieve their ambitious goals remain to be seen, and the agreement may prove to be largely symbolic. But symbols can be powerful, and we believe the agreement portends a brighter outlook for action on climate change in 2015.

What do Switzerland and China Have in Common?

By | Ecological Limits, Footprint for Business, Footprint for Finance, Footprint for Government, Guizhou Initiative | No Comments

Did you know the Chinese province of Guizhou in southwest China bears some striking resemblance to Switzerland? I confess I didn’t, until I was invited to Guizhou last month to speak at Eco-Forum Global. Since 2009, this annual conference gathers participants from around the world to share knowledge about policies regarding green economic transformation and ecological security. This year I spoke on a finance panel led by the chief economist of Bank of China, Ma Jun, and a panel organized by the Sino-Swiss Dialogue.

Just like Switzerland, Guizhou is landlocked and boasts a mountainous landscape. It is one of two provinces in China that President Xi Jinping declared to be testing grounds for China’s new focus on “eco-civilization” and the “China dream.”

Hoping to learn more from Switzerland to build that dream, Chinese officials announced the Guizhou-Switzerland Agreement on Establishing Mountainous Economy and eco-civilization at Eco-Forum Global this year. With its rich landscape, including spectacular lakes and waterfalls, Guizhou is believed to be an ideal location to apply the innovative cleantech, eco-tourism and sustainable development strategies that have enabled Switzerland to preserve its stunning natural environment.

The Guizhou-Switzerland agreement builds on a larger bilateral free trade agreement between China and Switzerland that was signed last year and just took effect in July.

My Sino-Swiss Dialogue keynote talk at Eco-Forum Global delved into the similarities between China and Switzerland, where Global Footprint has worked with four ministries to analyze the country’s resource dependence and make Footprint and biocapacity part of the Swiss statistical information data published annually.

Like many countries, both China and Switzerland are ecological debtor countries using more biocapacity than their own ecosystems can provide. They make up the difference through trade with trading partners who are also in ecological deficit.

Switzerland’s Ecological Footprint is four times larger than what ecosystems within Switzerland can renew. Its biocapacity deficit per person hasn’t changed over the last half century, and its financial resources have allowed it to easily access resources from abroad. However, because the world as a whole is becoming more constrained, Switzerland’s biocapacity deficit will become economically more significant in the future.

Switzerland: Stable Biocapacity Deficit

China’s Ecological Footprint is two times larger than its ecosystems can renew. Its biocapacity deficit has grown substantially amid the country’s rapid development of the past decade.

China: Rapid Footprint Growth

On the bright side, however, both Switzerland and China have worked to preserve their natural resources, particularly forests. In Switzerland, forests were under severe pressure of overexploitation at the onset of industrialization in the middle of the 19th century. Soil erosion and avalanches prompted reform in forestry management and Swiss forests now cover 30 percent of the country’s territory. China’s forests were also under pressure until the Natural Forest Protection Project was launched in 1998. By the end of 2003, the Chinese government had injected about 50 billion Yuan (about 6 billion USD) into the program, putting some 95 million hectares of natural forest in conservation nationwide. The government has recently committed an additional 220 billion Yuan (36 billion USD) to the project and aims to add an additional 7,800 hectares of forest area.

China has been acutely aware of resource constraints for decades, as has Switzerland. Many Swiss still remember World War II when the country only had enough domestic food to feed its population (then half the current size) for seven months per year. This sense of resource fragility has been an important factor spurring Switzerland’s focus on energy, material and water efficiency, high-performance buildings, effective public transportation, land protection, urban containment and forest conservation.

However, the global context within which China is developing today is markedly different to that of Switzerland in the past century. Since World War II, the entire planet has gone into ecological overshoot, with humanity now using one and a half times more from nature every year than the planet can renew in the same timeframe. Today we are living in a far more resource-constrained era, making it more important than ever for all countries to track and manage their natural assets.

With China’s Ecological Footprint continuing to grow, Guizhou Province is clearly a region at a crossroads. On the cusp of rapid development, it has enormous opportunities to seize the moment and build new economic momentum. The question is whether it will set policies that enable it to thrive while at the same time avoiding the pollution and congestion that has plagued other regions in China. Gleaning valuable lessons from Switzerland is certainly one important step. Of course, we also believe Guizhou Province will need data-driven decision-making tools like the Ecological Footprint to succeed as well.