Wealth Accounting and the
Valuation of Ecosystem Services
Botswana - Natural Capital as a Diversification Tool
Botswana is rich in natural resources. A combination of minerals, energy, protected areas, and crop, pastureland and non-timber forest products make the country’s natural capital worth a third of its total wealth.
This natural capital already plays a huge role in supporting Botswana’s economy—providing food, fuel, shelter and a livelihood to thousands of people while underpinning key activities, such as diamond mining which has dominated Botswana’s economy for more than 30 years.
But if this natural wealth is important now, it looks set to be even more critical in the future. The country’s government has identified several areas for growth — including nature-based tourism, mining and agriculture — which it hopes will simultaneously help diversify the economy and reduce poverty. To meet all three development goals, the government will need to optimize use of natural resources.
But the economic information needed to do that is often incomplete or missing. Moving beyond GDP—which does not explicitly incorporate the value of natural resources—as an indicator of economic growth is a priority. So too is finding ways to account for the broad mix of natural capital and better answer questions such as what role does Botswana’s huge coal reserves have to play, or how can local communities benefit from tourism?
Making WAVES in Botswana
The WAVES project in Botswana will help the country fill key information gaps and improve economic decision making. In particular, it will:
- Implement revised indicators that account for natural capital, including Adjusted Net National Income and Adjusted Net Savings; and build comprehensive wealth accounts to assess the prospects for long-term, sustainable growth
- Build detailed accounts about Botswana’s energy resources and energy use to assess the optimal energy mix for the future and examine the role of Botswana’s coal in a green economy
- Create national and ecosystem-based tourism accounts to inform management of eco-tourism in four key ecosystems: Okavango, Chobe, Makgadikgadi Pans, and Central Kalahari
- Compile water accounts for managing scarce water supplies and contributing to the policy on a national water tariff, scheduled for 2013–2014
These four strands of work will run in parallel and will feed in to key policy and planning processes like the Poverty-Environment Initiative. Botswana has a long history of economic planning for development and since 1966 has prepared ten National Development Plans. The WAVES project is expected to strengthen the planning process by ensuring a true consideration of natural resources and ecosystems; and so enable better decisions.
The story so far
WAVES in Botswana has developed a work plan detailing activities for 2012–2016, which has been approved by the steering committee and shared with stakeholders. The project team is now working with relevant government ministries to develop the institutional arrangements to implement the work plan.
A scoping study has already been drafted and reviewed at two stakeholder workshops. It is now being reviewed by the national steering committee as well as several external experts. The study aimed to answer questions like: Is Botswana’s economic growth path sustainable in the long term? What is the ideal energy mix, and how should Botswana use its vast coal reserves? How should limited water resources be used and how can tourism help in diversification of the economy as well as providing more jobs.
In addition to the scoping study, two ecosystem valuation studies have been completed—on the Okavango Delta and the Makgadikgadi Pan. WAVES will support work on other ecosystems, like the Chobe and adjoining forest land.