Bank executives, investors, companies like Wal-Mart and Woolworths, and 57 countries yesterday pledged to measure their levels of wealth by the health of their natural resources.
In an agreement spearheaded by the World Bank at the U.N. Conference on Sustainable Development in Rio de Janeiro, the countries and 86 private companies agreed to employ a "green" accounting system that values natural assets like clean air, water, forests and ecosystems along with traditional measures like gross domestic product.
Also yesterday, development banks pledged $175 billion to sustainable transportation in developing countries over the next decade, a move one environmental group called a "game changer" for public transit. The investment is not new money. Rather, it is part of a new united agenda among the multilateral development banks to prioritize urban transportation and rail over road and highway construction.
"There will no longer be any project being signed in transport that would overlook the need to promote sustainable transport characteristics," said Marc Juhel, sector manager for transport at the World Bank.
The pledge also included the development banks of Africa, Asia, Latin America and Europe as well as the Islamic Development Bank.
Juhel said the pledge won't spell the end of multilateral development bank investment in highways and other major infrastructure projects. But he said he expects bus, rail and other urban transportation measures to make up a larger percentage of banks' transportation spending.
"There will still be roads, because there is still a huge and uncompleted access agenda," Juhel said. But, he added, "it will be more balanced."
'Breakthrough' for cities
Holger Dalkman, director of the Center for Sustainable Transport at the World Resources Institute think tank, called the announcement "a major breakthrough" that recognizes the challenges of clean air, congestion and accessibility to transportation, particularly for people living in cities.
Dalkman also acknowledged the funding doesn't mean an end to public aid for highways, but said, "It's a step in that direction." He argued that being "smarter" about where to spend money -- like on creating safer infrastructure for pedestrians or cyclists, or building more high-tech, low-cost transportation systems -- will ultimately translate into economic growth.
Meanwhile, World Bank officials and heads of state also hailed yesterday's decision on natural capital accounts as a driver of economic growth.
"National governments must move beyond a narrow understanding of wealth," U.K. Deputy Prime Minister Nick Clegg said. "Right now we judge how well a country is doing by looking almost exclusively at the money it makes, ignoring the state of assets like forests or coastal areas -- vital natural capital." Only by accounting for environmental assets, he said, "will we start to make the sort of progress that's needed."
Yesterday's green accounting agreement has been in the works for several months. The World Bank has been working with countries from Botswana to the Philippines on the details of devising systems to make green accounting work. Yesterday, the government of the Netherlands pledged €2 million to the World Bank's ecosystem valuation program, and the government of France pledged €1 million.
The World Bank partnership includes: the U.N. Environment Programme, the U.N. Development Programme and the U.N. Statistical Commission; Botswana, Colombia, Costa Rica, Madagascar and the Philippines, which are implementing programs; and financial or technical support from Australia, Canada, France, Japan, Norway and the United Kingdom.