An historic opportunity—the eradication of poverty—is within reach of the 2005 World Summit. However, a critical barrier persists: progress on eliminating poverty will only be possible with expanded, more effectively targeted investments in environmental management as a means of achieving the Millennium Development Goals (MDGs).
Speeding progress towards the MDGs will require stepping up attention to and investment in the environment. Investing in sound and equitable environmental management makes good economic sense, and a major scaling-up of worldwide investment in the environment is essential for creating the opportunities that people need to lift themselves out of poverty. Increased investment alone is not enough, however. To be effective, investment must be accompanied by the empowerment of communities, local governments and the private sector to lead local development efforts. Of particular importance is the need for governance and policy reforms that extend to poor people secure property and user rights over the environmental assets that provide their livelihoods, and that ensure a greater voice in decisions affecting how these assets are managed. To inform deliberations at the Summit, the Poverty-Environment Partnership (PEP)—a network of more than 30 international development and environment agencies—launched the ‘Environment for the MDGs’ initiative to galvanize support for the significant scaling up of worldwide investment in environmental management to help win the fight against poverty and achieve the MDGs. The PEP commissioned two background reports—one on the economic case for investing in the environment to reduce poverty and the other on tools and methodologies for assessing environment’s contribution to poverty reduction and pro-poor growth. The Partnership has also prepared a brief synthesis paper summarizing the key messages of the two longer, more technical reports.
The following report on Investing in Environmental Wealth for Poverty Reduction makes an important contribution to the debate about poverty-environment relationships by documenting and evaluating the economic evidence surrounding investment in environmental assets as a strategy for fighting poverty. Prepared by leading environmental economist David Pearce, Professor Emeritus at University College London, the report surveys the current state of knowledge on several key environmental dimensions of poverty, including the direct and indirect dependence of the poor on natural resources, the vulnerability of the poor to environmental risk, the total cost of environmental interventions and investments needed to reach the MDGs, the economic benefits and rates of return to environmental investments, and major reforms needed to create a policy and governance context that will be conducive to cost-effective investments. Noting that current knowledge is sufficient to warrant immediate policy action, Professor Pearce theless identifies a few key areas where significant information gaps remain and further research is needed.
