Monday, January 7, 2002 - Page A1 The Globe and Mail GDP value must reflect eco-wealth, report says By ALANNA MITCHELL EARTH SCIENCES REPORTER
North Americans must radically alter the way they calculate gross domestic product to take into account the use of each country's environmental wealth, says a hard-hitting new report from the international environmental watchdog set up under NAFTA. That's because North America's natural resources -- from soil and forests to water and fish, and even clean air -- are being consumed at a rate that simply cannot be sustained. The watchdog of the North American free-trade agreement is calling for a way to assess how long such use can continue before it's too late. "The health of an environment that sustains 394 million people and an economy worth $9-trillion [U.S.] is at risk," concludes the first state-of-the-nations report from the North American Commission for Environmental Co-operation, to be published today. The report adds: "North Americans are faced with the paradox that many activities on which the North American economy is based impoverish the environment on which our well-being ultimately depends." As it stands, the internationally accepted system of national accounts fails to predict how long a country's environmental capital can be used, and at what rate, before parts of it collapse, the report says. "Unlike human or fabricated capital such as buildings and machines, the depreciation of natural capital is not written off against the value of its production," the 100-page report says. The planet's assets can be likened to a bank account, it says. "By 'spending' natural capital without replenishing it, or by damaging processes and living systems that cannot be fixed by technology, we are living off our capital rather than the interest," the report says. That this urging should come from an environmental group set up by the NAFTA partners, Canada, the United States and Mexico, is a measure of how seriously the new economic research on this topic is being taken. "Because of the research, we are becoming more fluent and aware of the part that ecosystems play," said Janine Ferretti, the CEC's executive director. "They're the backbone of prosperity." Mexico has done a pilot study on calculating an ecological GDP. It showed, for example, that Mexico's GDP calculated the regular way logged an average annual increase of 2.2 per cent from 1985 to 1992. The ecological GDP showed an average of 1.3 per cent because it took into account the depletion of natural assets. Both Canada and the United States have examined integrating measures of economy and environment. The United States studied the costs and savings of the Clean Air Act over 20 years, for example. Implementing the act cost $524-billion (U.S.), but saved the economy more than $6-trillion (U.S.). The fate of the cod fishery on Canada's East Coast is a perfect example of what happens when natural capital is not taken into account. Past governments encouraged the use of large fleets to catch and process fish to build up Newfoundland's economy. Because too many cod were fished out of the ocean, and too little was understood about how that system worked, the fishery collapsed. In 1992, Canada banned cod fishing. Stocks have still not rebounded and many scientists say they never will. It's a similar story with haddock and pollock. "Excessive fishing has destroyed a major piece of the environment," the report says. "In turn, that has destroyed part of the economy." Not understanding how a natural system worked led to the loss of tens of thousands of jobs and a special unemployment program that cost Ottawa $1.9-billion in the first five years. It is expected to cost another $760-million over the next three years. The growing sense of urgency in understanding the continent's economy in this way is borne out by some of the report's other findings. While there is some good news, such as the increase in protected areas to about 15 per cent of North America from about 5 per cent in 1970, there is also bad news. Agricultural practices such as no-till planting are lessening the degree of soil erosion in parts of the agricultural belt, yet soil is still disappearing. Now it's because farmers rely heavily on chemical fertilizers that erode soil structure instead of the compost and manure that build it up, the report says. As well, high use of fossil fuels is polluting the air and helping to damage the planet's climate. In the United States, the number of kilometres travelled by passengers on transit, rail and intercity bus has dropped by half since 1970 even as the appetite for bigger cars and longer trips increased. Old-growth forests in North America continue to disappear, replaced in part by planted trees that are not as resistant to disease. Mexico, for example, has already lost 95 per cent of its tropical humid forests and is losing forests at the fifth-quickest rate of any country in the world. Environmental groups have often accused the three governments of creating the CEC only to ignore its recommendations. Source url: http://www.globeandmail.com/servlet/GIS.Servlets.HTMLTemplate?tf=tgam/ common/Ful lStory.html&cf=tgam/common/FullStory.cfg&configFileLoc=tgam/config&vg= BigAdVaria bleGenerator&date=20020107&dateOffset=&hub=environment&title=Environme nt&cache_k ey=environment¤t_row=1&start_row=1&num_rows=1 ================================ Significant biodiversity loss across North America, NAFTA body's State of the Environment report says http://www.cec.org/news/details/index.cfm?varlan=english&ID=2441 Highlights from The North American Mosaic: A State of the Environment Report http://www.cec.org/pubs_docs/documents/index.cfm?varlan=english&ID=616 Compete Report - The North American Mosaic: A State of the Environment Report http://www.cec.org/pubs_docs/documents/index.cfm?varlan=english&ID=629 Janine Ferretti Executive Director Commission for Environmental Cooperation Bus: 514-350-4318 Fax: 514-350-4314 Email: [EMAIL PROTECTED] 393 rue St-Jacques Ouest, bureau 200 MontrČal QC H2Y 1N9 Web Site: http://www.cec.org
