Study links statistics to environmental harm Measure for wealth hides long-term loss

December 13, 1991|By Kim Clark | Kim Clark,Sun Staff Correspondent

WASHINGTON IFB — WASHINGTON -- The bean-counters of the world are harming Mother Earth, an environmental think tank charges.

In a 110-page report to be released today, the World Resources Institute finds new villains in the continuing pollution of the planet: accountants and economists.

The report documents the ongoing destruction of Costa Rica's forests and fisheries, and finds that part of the ecological devastation is linked to the way governments and banks around the world measure economies.

It seems strange to say that something as trivial-sounding as statistics could contribute to worldwide environmental problems.

But the failure of economists to reduce their evaluation of a nation's wealth when it cuts down trees, for example, encourages countries to cut down too many trees, the report contended.

Governments pass new laws based on their perceptions of the

health of their economies. And if statistics skew their view of the economies, a government's laws and actions will be skewed also, the report said.

Robert Repetto, a WRI economist, explained the problem this way:

Currently, most governments and banks use a system developed by the United Nations to measure the health of their economies. The United States, for example, recently changed its valuation of national goods and services to match the international community's standard.

But the U.N. system counts only the benefits of cutting down trees for sale or construction. Because it is difficult to estimate the value of a standing forest, the U.N.'s accounting system doesn't bother measuring it -- giving it no value at all, he said.

If individuals followed this accounting system, farmers would cut down and sell all their trees, then view themselves as rich, not realizing they had lost woodland that, if tended, would have provided fuel and lumber for generations, he said.

So, Third World countries, desperate to raise cash to pay off huge foreign debts and to create quick wealth for their citizens, are liquidating their natural resources because their leaders and creditors don't see any cost associated with environmental destruction, Mr. Repetto said.

"The national accounts create the illusion of income development when in fact national wealth is being destroyed," Mr. Repetto's report concluded. "Economic disaster masquerades as progress."

The WRI called on the United Nations and governments to change their accounting systems so that everyone -- from leaders to farmers -- can see the true costs of environmental damage.

U.N. officials didn't return calls asking for comment. And Rodrigo Sotella, minister for economic affairs at the Costa Rican Embassy, declined to comment because he had not seen the report.

But Salah el Serafy, the environmental adviser to the World Bank, said that he and many other economists have been fighting for years to get the United Nations to add natural resources to their accounts.

In fact, the United Nations will start collecting new numbers addressing the environmentalists' concerns in 1993, he said.

Though he's not satisfied with the U.N.'s "satellite" treatment of environmental costs, Mr. el Serafy said it was better than nothing.

Many economists and environmental leaders agree that changes in the statistics would be an improvement, Mr. el Serafy said. But progress has been stymied because it would hurt the images of many of the world's political leaders.

When such changes are made, many countries that current statistics indicate are economic successes, such as Costa Rica, will suddenly see their images deflated by their environmental problems.

"Politicians have a short-term horizon. They couldn't care less about liquidating their environmental capital, provided people think they are doing well, which the current statistics indicate. People don't want to hear they are really poorer" in the longer term, Mr. el Serafy explained.

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