It is challenging to attract everyone’s attention to environmental conservation amidst a deepening economic crisis as the priorities of the community have changed now. Many experts warn that the crisis is expected to hit hard the environment and biodiversity conservation in Sri Lanka. It is the responsibility of environmental professionals to play this significant role in developing strategic approaches to move forward by attempting to build a shared future in the current economical context of the country.
Biodiversity is crucial in the existence of humankind as the interaction between every living being is important because humans are also a part of it. Humans are heavily dependent on biodiversity and if this is not taken care of properly, eventually it will make a significant impact. Already it has exceeded the planetary boundaries of biodiversity when we consider the global context but the situation is the same for Sri Lanka too. However, when considering the situation in Sri Lanka, finding food and other resources has become the top priority of the people rather than caring about the conservation of the environment. Moreover, the increasing food prices and cost for other essentials may lead to influence people into environmental crimes such as illegal logging for firewood, poaching for meat, and sand mining which will be having severe consequences. Apart from the current situation, Sri Lanka’s environment was also put under huge pressure during the past two years at the behest of politicians. Releasing large extent of forests for agricultural purposes, and transferring other state forests to regional authorities for development purposes can be recognized as examples of some of the nearsighted decisions by the politicians and despite those unfavourable conditions, the environmentalists were putting hard work into ensuring the safeguard of the environment.
However, the experts warn that the economic crisis threatens to revise the years of hard work in environmental conservation and it also can jeopardise the current efforts on environmental monitoring and safeguard. Power failures, fuel deficiency and financial issues could exacerbate the problem as the officials from the responsible institutions such as the Department of Wildlife, Central Environmental Authority (CEA), Marine Environment Protection Agency (MEPA) etc. will not be able to work on their full potential. And it could be difficult to operate treatment plants and systems which may also cause severe environmental damage. Usually, the research and conservation activities will be the first to be slashed in an economic crisis and the government agencies which are dedicated to conservation will soon feel tired to abandon their vital work.
According to the experts, the mismanagement of the economic attributes of the country has led to poverty and its impacts are effective in both directly and indirectly on biodiversity. It has been proven that there is a heavy dependence on natural resources when a community declines over the poverty line and managing biodiversity is not going to be a priority.
However, currently, the government is attempting to tap the economic crisis in several ways. In order to solve the energy crisis, the country is thinking about renewable energy sources. Importantly, if these approaches are fast-tracked in an unplanned manner without proper assessments, the environment will be seriously impacted in the future.
It is not the option to find solutions to the crisis thinking solely about the economic and financial aspects but the well-being of the environment is crucial in this case now more than ever.
Sustainable Financing Options as a way forward
The country should seek immediate economic stabilization and recovery first and it can use the available economical instruments which can be used without exploiting natural resources. Ruthless economic activities with a focus on getting back to the previous status rather than focusing on sustainable utilization of the natural resources will devastate the years of hard work of conservation which will eventually bring the country’s environment back and, still it has the opportunity for Sri Lanka not to go down that disastrous path.
As a starting point for tapping these new sustainable financial instruments, it is important to recognize that nature has value. According to the experts, it is sceptical that the general public has the right focus on nature when it is considered the Sri Lankan economic layers from micro to macro levels. However, it is not possible to wait until the economy would get stabilized to think of conservation again but both the challenges should be approached concurrently. Here, it has to think innovatively to develop new strategies to generate new income sources linked with the environmental objectives. Initially, it should be recognized the value of nature at both the national level and enterprise level and then the economic recovery methods should be linked to environmental growth.
There are several sustainable finance instruments which are being practised by countries currently which include; Green Bonds, Blue Bonds, Nature Swaps, Nature Performance Bonds etc. These instruments can work on environmental protection or conservation initiatives while enhancing the national capital. Here, it downscales the principal payments depending on the outcome on the side, such as restoration of the eco-system etc. But these have to be monitored, measured and verified rigorously.
Nature-performing bonds allow for both restructuring the existing debt as well as issuing new debts. Debt for nature swaps is typically used to restructure existing higher-cost debt for lower-cost debt linked to some conservation target. Debt for nature swaps is already established relative simplicity.
However, the ability to proceed with these instruments in Sri Lanka is questionable due to its poor history of maintaining financial discipline and poor track record on sovereign debt. But here, it is needed both financial and environmental conservation disciplines. Financing through this may appear easy because the funds are available and the instruments are well-known but according to the authorities it is not easy when it comes to the implementation stage. Here, it has to pay extra attention to make sure that the conservation goals of the bond are achieved and it has to check that the discipline and the required institutional framework that is needed are there in order to stick to these commitments.
Most of these sustainability-linked bonds have clauses where if it is not met the conservation goals or natural resource management targets, the interest rate for the particular instrument gets kicked up to a commercial rate. Thus, if it is failed to achieve the goals as per the clauses of the bond, it has to pay the typical commercial rates at the end of the maturity period.
When it is considered environmental conservation, Sri Lanka was failing in several aspects such as systematic eco-system conservation, national biodiversity strategy and action plan as the environmentalists have been battling with the governments to convince the importance of conservation.
In fact, now this could be a good opportunity to showcase that environmental conservation really pays off and it highlights a reason why everyone could understand why nature should be conserved. It will open up a new way to think about the value of biodiversity in terms of real monetary terms. Although it was preparing a number of strategic plans, policy documents and proposals, a few of them were implemented but now it has the opportunity to mainstream environmental conservation.
However, this could be the right time to put forward to proceed with this type of sovereign instrument but first, it is needed to make sure that both economists and environmentalists have the same and clear picture of these instruments. Then, also it is needed to formulate a suitable institutional framework enabling both these two sectors to work collaboratively to achieve the same goal. In Sri Lanka, the Central Bank and National Treasury need to have their own discussions with the environmental-dedicated institutions such as; the Central Environmental Authority, the Department of Wildlife Conservation and Marine Environment Protection Agency etc.
Conservation should be done as it is connected to the community, livelihood component and sustainable development. Usually, the communities are defenders as they also could be encroaching and damaging the environment. Therefore, it has to be striking a balance in creating awareness among communities ensuring that the environment is not damaged while making sure that the livelihood and the economic empowerment of people are ensured. Due to the current context of the country, the livelihood of people is threatened and it creates an additional burden on conservation efforts. Thus, this has to be done in an equitable manner while the environment is protected. Here, it is important that engage communities in those processes and allocate direct benefits for them.
It should be assessed the investments properly and also the impacts should be assessed and decide how the benefits are distributed among the community while setting up the institutional arrangement to facilitate in national levels and local authority levels; Divisional Secretary’s divisions and Grama Niladhari divisions. Here, it is important to have a crowd-sourced system to monitor and maintain the conservation efforts and utilize the finances effectively to address conservation objectives as well as the economic crisis. As a latecomer to these sovereign instruments, Sri Lanka has the benefits of implementing many frameworks which can address both economic calamity and the environment conservation requirements.
As Sri Lanka grapples with an economic meltdown, environmental experts say the focus on conservation should not be lost, as this would reverse hard-earned gains and make Sri Lanka’s environmental issues even more challenging to resolve over the long term.
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