1. Maradan| © Ecosys PEI | Poverty-Environment Initiative | UNEP - UNDP Economic assessment of poverty and environment linkages in Mozambique Maputo, VIP hotel, November 15, 2011 Dr David Maradan Pres.-Dir. Ecosys SA Geneva Lecturer Univ Geneva, Fribourg & Geneva Business School

2. © Ecosys Contents 1.Objectives of the macro study 2.Methodology and Results The contribution of the environment to the Mozambican economy : Economico-environmental analysis : Cost of environmental damages and remediation Distributive analysis 3. Recommendations

3. © Ecosys Objectives - The environmental economic analysis of the Mozambican economy 1.Measure the cost of environmental damages, compare it to the production of economic value 2.Measure the cost of inefficiencies, compare it to the production of economic value 3.Measure the cost of remediation (how does it cost to avoid the damages?) 4.Indicates priorities for actions (looking at efficiencies) 5.Examine the links between damages and poverty (who is suffering from the damages?) 6.Indicates priorities for actions looking at CB ratios and equity issues 7.Propose recommendations

4. © Ecosys Methodology – The contribution of the environment to the economy Measuring the value added generated by the primary sector  extract or harvest products from the earth Agriculture, mining, forestry, farming, grazing, hunting and gathering, fishing, and quarrying. + Tourism look at the national statistics Proxies for measuring the non-market activities

5. © Ecosys Results – The contribution of the environment to the economy : official statistics

6. © Ecosys Results – The contribution of the environment to the economy

7. © Ecosys Framework of analysis COSTS BENEFITS Economic | financial Environmental damages Environmental Benefits Environmental Economico-environmental = econenv

8. © Ecosys COSTS BENEFITS Economic | financial Firms Environmental damages Environmental Benefits Environmental Human society growing benefits remediation Decreasing damages: new benefits Environmental expenditures Framework of analysis

9. © Ecosys Damage costs & inefficiencies costs (DIC) :  economic impacts What is the value of the loss of well-being from the surrounding population due to air pollution ? Remediation Costs (RC) :  protection measures How much does it cost to decrease air pollution so that the damages vanish? DIC/RC Ratios :  decision-making tools Investing 1 euro in remediation, how much damages are avoided? Operating where the remediation is the more efficient. Framework of analysis

10. © Ecosys Damages and inefficiencies costs

11. © Ecosys Damages and inefficiencies costs – environmental domains

12. © Ecosys Damages and inefficiencies costs – economic categories

13. © Ecosys Cost of remediation – environmental domains

14. © Ecosys Ratios between CDI and CR – environmental domains

15. © Ecosys Ratios between CDI and CR

16. © Ecosys Genuine savings – AFD study

17. © Ecosys Comparisons - AFD study

18. © Ecosys Comparisons – World bank and PEI studies

19. © Ecosys Distributives analysis : methodology First step for grasping information (to be verified and detailed) 35 answers by local experts and stakeholders

20. © Ecosys Distributive effects - results

21. © Ecosys Linking the distributive and cost of damages analyses

22. © Ecosys NEW : Linking the distributive and cost of damages analyses

23. © Ecosys Conclusions The environment is important for the economy of Mozambique = old facts  new evidences The environment affects poor people through three main channels: o Livelihoods o Health o Vulnerability Main parameters between environmental resources and poverty in the case of Mozambique 1.Land, fish resources, deforestation, water supply and quality 2.Air quality, waste, inefficiencies

24. © Ecosys Recommendations Developping of information (Economic, Income distribution, Environment, Inefficiencies) Strengthen existing institutions Statistical framework in the national accounting system for integrating environmental information in the main performance indicators Increase budget devoted to environmental protection and the better management of natural resources Prioritizing expenditures Tax increase Increasing competencies and knowledge Priorities for actions The continuation of the development of water-related infrastructures Programs that monitor agriculture, forestry and fishery

25. Recommendations Reforming and implementing policies is necessary Specify budget allocation in national development strategy and macro-economic policy Process of consultation of Land and Forest acts have to be clarify Environmentally-related policies have to be better coordinated Greater institutional coordination around sustainable environment management Controlling the exploration and use of the country natural resources Agriculture : productivity enhancing methods have to monitored to consider their environmental consequences +sustainable water-use strategies Financing mechanisms Awareness campaigns Financial services Maradan| © Ecosys

26. Thank you for your attention