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Biodiversity:
A World Bank Perspective

Ismail Serageldin
Special Programs, The World Bank, 1818 H Street NW, Washington, DC 20433

We live in a time of unprecedented assault on biodiversity and natural resources at global, national, and local levels. The battle for the environment is being fought between growing populations and the need to conserve natural systems in countless arenas. Solutions are attainable, but it will require our genius, commitment, and ability to cooperate if we are to secure a future that generations to come can celebrate, instead of looking back and condemning us for opportunities lost, challenges forgone.

From the World Bank's point of view, however, that does not translate only into protection of pristine environments and conservation of a rare plant or animal, important as these might be. Rather, it is about the maintenance of life-support systems and people. It is about recognizing the need to conserve resources and manage them sustainably so that people have access to clean air, clean water, and fertile soils both now and in the future. Today, such access is denied to much of mankind.

At the global level, we face the pervasive reach of poverty, uncertainty over food security and the resource base, and increasingly diminished if not lost natural habitats and ecosystems. Biodiversity is being eroded at an unprecedented rate, and we can only guess its ultimate impact. Of the estimated 10–100 million species on the planet, only 1.4 million have been named. Fungi are the least known (only 69,000 of the 1.6 million thought to exist have been described) and we can only imagine the complexity and wealth of the estimated 8 million arthropods. However, bacteria are the “black hole” of systematics, with only some 4,000 recognized. In a recent study in Norway, 4,000–5,000 species (virtually all

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new to science) were indicated among the 10 billion organisms to be found in each gram of forest soil.

Humanity's call on the food base is precarious. Although staple cereal and root crops will continue to feed humanity for some time to come, the jettisoning of many useful plants will bring unnecessary costs. The decrease in the number of species used in forestry and in animal husbandry has also narrowed the genetic base, greatly reducing the options for adapting to change.

We continue to struggle in assessing the economic values of environmental assets, especially biodiversity. Methods are being developed to introduce conservation practices in the marketplace and to reduce the subsidizing of the mining of natural systems—full-cost accounting, green taxes, economic incentives for conservation, and internalization of environmental externalities. New ways are being used to measure well-being by looking at the contribution of natural human and social capital, not just human-made capital, which is usually considered in financial and economic accounts. Recent findings reinforce the importance of the natural-resource base of all economies and the fundamental role of human resources in determining a nation's wealth and, in turn, the opportunities for welfare gains for a nation's population.

It is particularly sobering to contemplate the pervasive influence of humanity on the natural environment and the threats posed to ecosystems: marine fisheries are being harvested to extinction, land transformation and water use are pressuring every ecosystem, and modified rates of nitrogen fixation and CO2 concentrations are altering global climate. These and other human effects pose substantial threats to both sustainable development and the very quality of life.

The major causes of biodiversity loss are the fragmentation, degradation, or loss of habitats (through conversion by agriculture, infrastructure, or urbanization), overexploitation of biological resources, the introduction of nonnative species, pollution, and climate change. It is estimated that extinction rates of plants and vertebrates are some 50–100 times higher than the expected natural rate and that future extinction rates will be substantially more than 1,000 times the natural rate (Reid and others 1992). For some groups of plants and vertebrates, 5–25% of identified species are already listed as threatened with extinction. The result might induce profound changes in many ecosystems and render them much less useful to people even if not less complex ecologically.

The deforestation of tropical rain forests, the greatest cause of species extinction, is expected to continue. Some 50% of the world's species (estimated at 10–100 million) are harbored by rain forests, and the current rate of loss might exceed 50,000/year, 137/day, or 6/hour. The loss of old-growth forest remains a major concern in many temperate countries.

Sound management of the earth's precious water resources constitutes the greatest challenge to sustainable development and the conservation of freshwater biodiversity. Freshwater fish are the vertebrate group that has suffered the highest extinction rates in both tropical and temperate regions. The productivity of freshwater ecosystems and their economic benefits are well known; if not properly managed, the competing demands of water, increasing pollution, the alteration of the hydrologic cycle, and the introduction of alien

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species will compromise the ability of freshwater ecosystems to sustain human livelihood.

Marine biodiversity is also experiencing overexploitation, habitat loss, and pollution; indeed, overfishing is the greatest threat to marine biodiversity and ecosystems. Protection of marine biodiversity is critical because the marine environment has greater diversity at higher taxonomic levels than land—coral reefs harbor over 1 million species of plants and animals and constitute the largest untapped source of bioproducts.

Change and disturbance are essential features of ecosystems, but ecologists view the survival of complex systems as depending on connectivity and interdependence among their parts and on feedback among related processes. This focus is helping lead to partnerships and to the understanding and building of motivational structures to achieve desired ends. Thus, biodiversity conservation and management are not just ecological concerns; for many countries, they are also intrinsic to socioeconomic development, particularly for the poor. Biological resources provide the most important contributions to livelihoods and welfare: food, medicines, health, income, employment, and cultural integrity. Over 80% of the world's population depends partly on traditional medicines and medicinal plants, and some 60% of plant species (35,000) have potential medicinal value. About 7,000 compounds have been extracted from plants, leading to products as varied as aspirin and birth-control pills; the search for more has never been greater.

Of the thousands of plant species deemed edible for humans, some 20 produce the vast majority of the world's food. Staple crops—such as wheat, maize, rice, and potatoes—are used to feed more people than the next 26 crops combined. Likewise, sheep, goats, cattle, and pigs supply nearly all land-based protein for human consumption.

The same process of specialization is evident for varieties within species—humans are increasingly reliant on a narrow range of species and then on specific varieties of these species. Consequently, biodiversity conservation is equally concerned with sustaining greater varieties of specialized and nonspecialized species. To meet that challenge, two approaches are being adopted: ensuring an adequate supply of genetic diversity for such industries as agriculture and medicine, and protecting unconverted habitats for the supply of genetic diversity.

Conserving biological diversity needs to address complex issues that call for a wide range of responses across many private and public sectors. All responses are necessary, with adjustments for local conditions: in situ conservation, ex situ conservation, intellectual-property rights, indigenous knowledge, human and institutional capacity, access to technology, equitable sharing of benefits, morals and ethics, and biosafety and risk. Information on those issues is becoming more readily available, and this will help to address such central problems as limits to the flow of germplasm (particularly of processed products), the debate over intellectual-property rights, and trade rules. Basic inventory and fundamental research work should be carried out simultaneously with field action, the two forms of activity reinforcing each other.

High-yielding crop varieties produced during the “Green Revolution” helped to avert a food crisis in the 1960s. It has continued to save land, and its influence

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is still spreading, but a huge agenda remains. More genetically diverse new crop varieties are needed, and we need to adopt integrated pest management to minimize the use of pesticides. Likewise, on-farm water and nutrient management combined with traditional wisdom will produce efficiencies for farmers and maintain the health and productivity of agricultural systems. And the promise of and obstacles to biotechnology continue a lively debate, but we can be confident that it too will play a seminal role in securing food on a more sustainable basis, recognizing the mutual interest of the material-rich states and the biodiversity-rich states in the development and conservation of the remaining biological diversity.

The World Bank is the largest financier of targeted environmental projects, with an active portfolio of more than 170 projects at a funding level of $15 billion. Lending in biodiversity conservation itself has grown to $956 million, involving 101 projects in 56 countries. Investment has leveraged an additional $536 million from borrowing governments and donors, bringing the total commitment since 1989 to $1.34 billion. In addition to projects and project components with specific biodiversity objectives (the biodiversity portfolio), the bank has supported environmental projects that can have a favorable, although indirect, effect on biodiversity. Of these “environmental” projects, the ones aimed at improving natural-resource management (“green” projects) and those designed to strengthen environmental institutions (“institutional” projects) can help to conserve biodiversity through improved natural-resource management and development of appropriate incentives and policies.

The emphasis on sustainable economic development, the better valuation of renewable natural resources, strengthening of national institutional capacity, and improvement in project preparation and implementation will all benefit the conservation and use of biodiversity. It is clear that biodiversity will not be conserved without consideration of the broader context, but improving the management of biological resources in general will not prove sufficient. Biodiversity can and should be addressed as a distinct problem although it is related to the degradation of biological resources.

Sustainable use and biodiversity conservation also require understanding of the social and economic contexts. In the case of the rural poor, biological resources are often the most important source of economic and social well-being in the form of food supplies, medicine, shelter, income, employment, and cultural integrity. Successful biodiversity conservation also depends on sound policies and effective institutional and social arrangements.

A wide range of national policies, laws, and regulations can create “perverse” incentives that discourage conservation even as other policies are intended to provide incentives to conserve. For example, the conversion of natural areas and loss of biodiversity have often been accelerated by economic policies that encourage production for export markets, promote population resettlement, or open remote areas to road construction and logging. Policies aimed at increasing agriculture, forestry, fisheries, and energy and industrial production can have similar effects. Appropriate policies provide the basis for national development and for meeting the economic needs of people, but inappropriate policies can result in unsustainable and inefficient natural-resource use and contribute unnecessarily to the loss

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of biologically important natural habitats and species. Policies related to land tenure, forestry, and agriculture are particularly critical in this respect.

Diverse experience has shown that the role of institutions in conservation is complex and taxing. Top-down conservation has seldom been effective except when large budgets are available for enforcement and society is willing to accept a rather undemocratic conservation process. Giving responsibility to local government and nongovernment organizations appears to create both opportunities and potential problems. To take advantage of the former while avoiding the latter, it seems that a cluster of arrangements must be made as a whole if conservation is to work well in an institutionalized setting. These arrangements include provisions for local participation, capacity-building, and incentive structures.

Decentralization can increase local responsibility for biodiversity conservation, making it more relevant and useful to local people. Reforms that a country might make affecting self-regulation, tenure, and accountability will help to ensure that people who decide how to use biological resources are directly affected by the consequences of their decisions. By shortening the feedback loop between a decision and its effect, such reforms will reward cautious decision-making. In addition, changes that give authority specifically to people living in the managed environment encourage decisions that are responsive to local conditions. If other local stakeholders are encouraged and enabled to question the decisions, responsibility will be promoted and a strong force for good governance will have been created.

The tools that can be used to conserve biodiversity—the protection of critical ecosystems (in situ measures) and such entities as arboretums, aquariums, botanical gardens and zoos, and seed and gene banks (ex situ measures)—all provide enormous benefits to humankind. Each conservation tool has its place in a comprehensive strategy for conserving biodiversity, including meeting human needs and maintaining the greatest possible numbers of species and genes.

Most national governments have established legal means for protecting habitats that are critical for conserving biological resources; the responsibility is often shared by public and private institutions. Although accomplishments have been impressive, the amount of protected habitat and ecosystems needs to be increased substantially if these areas are to ensure the long-term conservation of the world's biodiversity. However, such protected areas will succeed only if they are effectively managed and if the management of the surrounding areas is compatible with the objectives of the protected areas. That will typically mean making protected areas parts of larger regional schemes to ensure biological and social sustainability and to deliver appropriate benefits to neighboring populations.

Ex situ conservation programs supplement in situ conservation by providing for long-term storage and analysis, testing, and propagation of threatened and rare species of plants and animals and their propagules. They are especially important for wild species whose populations are severely reduced, serving as a backup to in situ conservation, as a source of material for reintroductions, and as a major repository of genetic material for future programs of breeding of domestic species. Some ex situ facilities—notably zoos and botanical gardens—offer important opportunities for public education and contribute substantially to taxonomy and field research.

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Many of the current responses to the world's biotic impoverishment have been supported by international conventions that have fostered cooperation and partnerships in conserving biodiversity. These conventions, especially the Convention on Biological Diversity (CBD), represent unprecedented opportunities for the development of institutions concerned with fostering environmentally sustainable development. Posing unique intellectual challenges as it does, the CBD provides perspectives on a number of disciplines—its biological foundation is partnered by economics, sociology, and other social sciences to bring innovation and integration and to facilitate consensus-building. It will also help to define a systematic approach to encouraging investment in biodiversity.

Current approaches to sustainable development are still rudimentary. A roug-hand-ready set of initiatives is in place, the development cycle is undergoing change (from a project orientation to one of listening, piloting, assessing, and mainstreaming), new partnerships are emerging, and the increasing accessibility to information is challenging the ownership of decision-making. But promising though these developments are, we must be sure of their selective and rigorous application.

Progress has always been heralded by paradigm shifts that seemed somehow difficult and dangerous, but moved the world forward into new realms of freedom and prosperity. We need to promote a paradigm shift in how we think about development—we need to think holistically, and we need to consider what is best for the common good. We need to do that for the poor and the marginalized of the world. We need to do it for the women who are carrying the burden of continuing degradation and discrimination. We need to do it for the future generations for whom we are but passing stewards of this globe.

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