The Economics of Conservation

Mar 28, 07:39 AM

Current Headlines: LAST week, at a conference on forestry management and conservation, Natural Resources and Environment Minister Datuk Seri Azmi Khalid floated the idea that state governments should consider going into logging rather than award timber concessions because there's more money to be made this way compared to the pittance they get from royalties. On Monday, at a conference organised by the Institute of Strategic and International Studies Malaysia on sustainable water resources and the environment, Energy, Water and Communications Minister Datuk Seri Dr Lim Keng Yaik argued that state governments can make more money from selling water than from logging. It appears, however, that it is the state of the environment and not the state of the economy that was uppermost in the minds of the ministers. What they seemed to be touting were financial schemes that could boost the state coffers without being as destructive to the environment as the current sources of state revenue.

As it is, when it comes to the conservation of biodiversity-rich habitats and the sustainable development of forests, water and other natural resources, state governments have tended to drag their feet. It is unfortunate that the states have shown scant concern for the environment in developing their natural resources. In a sense, however, they are caught between a rock and a hard place when it comes to balancing the budget and protecting the environment. On the one hand, economic activities such as logging and mining contribute to ecological degradation. On the other hand, these are the staple sources of state revenue. The merit of the money-making ideas of the ministers is that they open up choices to the states and provide economic incentives for preventing deforestation and protecting the water catchment areas.

Moreover, the ministers seem to be developing wider arguments in support of conservation by bringing economics into the picture. When it comes to conservation, it appears that it is the ecological impacts that have taken centre stage. As it is, decision-makers, especially at the state level, do not appear to have a sufficient understanding of the economic value of conservation. Putting a monetary value on, say, the economic benefits of the protection of the mangrove forests and coral reefs to the fishing industry would be, therefore, a step in the right direction. It is time to take the economic arguments from the margins to the centre of the debate on the environment, and draw more directly the connections between the economics of conservation and sustainable development.

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