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South Sudan’s unprecedented opportunity: The case for early investment in natural capital and nature-based solutions to climate change.

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LINKEDIN 03 APR 2020

To suggest that South Sudan is at a critical place in its history is an understatement. With nascent institutions, poor infrastructure, and an economy built on the twin pillars of oil revenues and humanitarian assistance, South Sudan scores near the bottom in most development indices. However, with the emergence of a government of national unity, South Sudan has a key opportunity to invest in a different development trajectory than many other nations, by investing in its natural capital and nature-based solutions to climate change.

Whether in developed country contexts or in emerging economies, natural capital assets underpin all societal activities. Guerry et al., (2015)[1] define natural capital as “the living and nonliving components of ecosystems—other than people and what they manufacture—that contribute to the generation of goods and services of value for people.” More broadly, natural capital assets are comprised of the goods and services that humans get from the environment without which we would not be able to function. These include things like pollination of our food crops by insects, soil stabilization and fertility, hydrological cycling, and greenhouse gas sequestration, provided by trees and other plants. Conservative global estimates of the value of ecosystem goods and services created by natural capital assets, range upwards of $125 trillion annually (Costanza et al., 2014)[2]. Arguably, the most developed forms of valuation are in the carbon markets, and the trade in GHG emissions reductions. In light of the impacts of climate change, greenhouse gas sequestration is of particular relevance, as a nature-based solution to climate change.

Why South Sudan?
South Sudan is endowed with a wide variety of natural landscapes. This variety of ecosystems, hosts globally significant levels of biodiversity, including highly diverse forests species, and large mammal movements such as the annual migration of White-eared kob (Kobus kob leucotis), Mongalla gazelle (Eudorcas albonotata) and Tiang (Damaliscus lunatus tiang) across the Boma-Jonglei-Equatoria Landscape. Moreover, with the Nile river and its tributaries flowing south to north across the country, the hydrological cycling services provided by these landscapes, serve the wider region with transpiration and precipitation, and other ecosystem services such as soil replenishment. Generally, the more intact landscapes are, with a full complement of biodiversity, the more capacity the landscape has to generate ecosystem services. Importantly South Sudan contains critically important forest ecosystems including Afromontane forests, extensive woodlands and savannahs, and one of the easternmost extensions of the Congo-basin humid forest.

As a new nation, South Sudan’s population is directly dependent on its landscapes for livelihoods and well-being. The World Bank estimates that up to 85% of the population of roughly 13 million are dependent on rain-fed agriculture (World Bank, 2016)[3]. Biomass fuel, both firewood and charcoal, remains the most utilized form of energy for cooking, constituting 96% of household energy needs country-wide (AfDB, 2013)[4] and at least 88% of Juba’s household energy supply (UNEP, 2015)[5]. It is estimated that more than half a million tonnes of biomass passed through Juba annually (Adkins, 2018)[6].

However, even against that backdrop South Sudan’s landscapes remain resilient, relatively intact, with large, connected and undisturbed areas. Whereas many countries in the region are experiencing massive conversion of ecosystems, infrastructure impacting connectivity, plummeting levels of biodiversity and population pressure, paradoxically, South Sudan faces the opposite situation. To date there have been relatively few investments in conservation and natural resource management, but equally few in large scale infrastructural development and the associated human disturbance that comes with it.

This situation creates an important opportunity that few other nations have had – to incorporate the sustainable management and conservation of natural capital assets into the country’s development trajectory, explicitly acknowledging environmental goods and services as the bedrock of development.

Leveraging Opportunities
South Sudan’s current revenue base is built on two main pillars: oil revenue, and foreign aid. However, both sources are plagued with uncertainty. In the wake of independence in 2011, South Sudan has struggled to develop legal and policy frameworks to support sustainable land management and instead focused on dividends from the exploitation of non-renewable oil and gas reserves. Equally, donor fatigue with South Sudan’s governance since independence, threatens to undermine gains in institution building, and stability.

Because South Sudan’s population is largely directly dependent on the health of the land sector, South Sudanese are at particularly high risk to the impacts of land degradation and climate change. Global climate change and the associated challenges are impacting sub-Saharan Africa more severely than other parts of the globe.

Low levels of income, education, and livelihood options put South Sudanese at a particularly high risk of failing to develop resilience to these changes.

As global oil prices remain deflated, and the transition to renewable energy sources gains traction, a diversified economy with multiple revenue streams is fundamental to bringing about stability, development, and good governance. In looking to a diversified economy, the risk is that South Sudan will copy the development trajectory of other nations, and over-leverage natural resources such as forests and wetlands, to achieve development goals – at the cost of biodiversity and intact landscapes. However, what if South Sudan was able to leverage alternative models for revenue generation and to deliver sustainable management of its natural capital at the same time?

The Paris Agreement and nature-based solutions to climate change
Climate change mitigation activities generated from conserving existing ecosystems or enhancing greenhouse gas sinks through sustainable management of ecosystems such as forests, are known as nature-based solutions. Nature-based solutions are estimated to be able to provide more than 30% of global mitigation potential, placing countries like South Sudan at an advantage (Griscom et al., 2020)[7].

The Paris Agreement is the critical policy piece setting out the basis for international cooperation to achieve much greater action on climate change across the globe. This is particularly important in creating an avenue for partnerships between different countries. Although not yet ratified, South Sudan signed the Paris Agreement (PA) on April 22, 2016, and in their Intended Nationally Determined Contribution, highlighted their intention to use the land sector, particularly forests, in mitigating greenhouse gas emissions. To date, however, the path for doing this has not yet been articulated as the rule book for the Paris Agreement hasn’t been fully decided upon.

However, in anticipation of this, Articles 5 and 6 of the PA are of direct relevance to South Sudan, laying the groundwork for increased cooperation on forest protection and the enhancement of existing carbon sinks and stocks (Article 5) and the establishment of a global platform for trading mitigation outcomes (Article 6). Specifically, Article 6 may present an important opportunity to diversify revenue streams for South Sudan. Due to the relatively intact nature of South Sudan’s landscapes, and the low level of industrial activity, South Sudan’s greenhouse gas emissions profile is relatively small. Actions that South Sudan takes to protect greenhouse gas sinks such as its forests and other landscapes, could be tracked, verified, and demonstrated to offset emissions in other nations. Theoretically, excess emissions mitigation could be sold as an Internationally Transferred Mitigation Outcome (ITMO). ITMOs could be traded with other countries directly (as described in Article 6.2) or with a centralized credit registry (Art. 6.4) in return for much needed revenue for ongoing conservation and sustainable management of forests.

Challenges
Technical Capacity for Monitoring and Verification of Emissions Mitigation Potential
As in many post-conflict environments, South Sudan’s technical capacity and resources are very limited. In order to take advantage of this opportunity afforded in the PA, there are a number of key elements that South Sudan will need to develop. Critically, there will need to be a system for ensuring confidence in the veracity of the emissions reductions provided by South Sudan’s natural capital assets. These systems are known as Monitoring, Reporting and Verification (MRV) systems and currently, South Sudan doesn’t have this capacity. Any system that would be established would need to be aligned to at least the Intergovernmental Panel on Climate Change’s guidance and rigor, in order to provide the level of confidence needed for other nations to engage with South Sudan and take confidence in the estimates of mitigation benefit that South Sudan could generate from the land sector.

Governance and Insecurity
Insecurity and ongoing conflict in some areas means that establishing a legal and policy framework, and legitimate natural resource governance, remains extremely difficult. In order to conserve and manage natural assets, some form of legitimated governance must be agreed upon between all parties. Long-stalled policy and legislation, including the ratification of the Paris Agreement, need to be prioritized for effective governance of natural resources to be leveraged to generated financial benefits. Without a legal and policy framework for managing natural capital assets, demonstrating and ensuring the long-term permanence of effective management actions remains difficult[8]. Additionally, ensuring equitable access and benefit-sharing with resource users in the landscapes, is also of critical importance. However, some examples of progress on this front have been made, especially in regard to the management of national parks and the protected areas network in the country.

Focusing on the Trees, but not the Forests
Another challenge is the distraction created by the focus on teak trade. In recent years, several high-profile media reports and articles have focused on the teak extraction as the preeminent environmental issue in South Sudan, claiming that the teak trade is creating massive deforestation. As a plantation crop, teak is always destined for harvest, and including harvesting it as “deforestation” is somewhat misguided. Unfortunately, this emphasis belies more serious environmental issues such as illegal harvesting of indigenous forest, land conversion, and charcoal extraction.

This doesn’t mean that the teak industry does not need significant investments in transparency, sustainable forest management, and governance (which it absolutely does), but it is not the defining environmental issue of South Sudan. Making it so does two things: 1) frightens away legitimate investors with good records in sustainable natural resource management who would bring much needed investment to the forestry sector fearing that they will be ‘lumped in’ with illegitimate operations, and 2) creates a barrier to addressing the more pressing issues of environmental governance, protected areas establishment, watershed management, etc. by needing to “resolve” the teak issue, before being to move forward with better policy and legislation. In short, because of the high-profile nature of teak, the emphasis frustrates broader attempts to address natural resource management. Separating plantation management policies from indigenous forest management policies will be critical.

Solutions
Some potential solutions to the challenges listed above do exist. For example, several pieces of policy and associated bills are already well-advanced in draft form. De-linking the more contentious issues, such as the management of commercial, non-indigenous teak plantations from these legislative instruments may allow them to move more readily through the legislative process.

Likewise, with a relatively well-developed national park and reserve system, focusing on land where a supportive legal and policy environment already exists, and which is by and large, relatively well-respected could offer potential as a pilot or demonstration sites for activities under the Paris Agreement.

Regarding the need for establishing an MRV system in the country, South Sudan is in a position where it can take advantage of massive technological advances in the monitoring of terrestrial landscapes, which have developed in the past few years. This can be done without having to commit South Sudan to expensive, committed infrastructure, and bespoke systems with ongoing maintenance costs. Generic, robust, cloud-based systems such as the FLINTpro (www.flintpro.com) would allow South Sudan to monitor their landscapes with the same internationally accepted rigor that many developed nations have and aligned with the requirements of the IPCC. This would also allow South Sudan to leapfrog other systems for environmental planning and decision-making in the world, while avoiding the costly need to develop bespoke in-house systems.

Lastly, in order to catalyze these processes, integrating the potential of natural capital assets into the sustainability plans of bilateral and multilateral donor programs is essential. Thankfully, more and more multilateral and bilateral donors are investing in climate change mitigation through nature-based solutions, as a part of a holistic suite of activities designed to meet the Sustainable Development Goals. In the case of South Sudan, efforts should be made to see the humanitarian situation in the context of the need to manage the land sector to provide long-term stability and sustainable livelihoods, while diversifying the revenue streams for the country. Efforts to align these types of thinking are already evident in donor bodies like the Green Climate Fund, the Global Environment Facility, and Norway’s International Climate and Forestry Initiative.

Conclusion
South Sudan has an unprecedented opportunity to embrace its natural capital assets and leverage them in a sustainable way to provide alternative revenue sources critical to the country’s development trajectory. By using mechanisms such as the Paris Agreement, combined with advances in technology for MRV, South Sudan could generate substantial benefits of global importance while conserving its natural heritage and managing its natural resources. In order to do this, several key challenges must be addressed and integrated into traditional humanitarian and development planning. Such is the challenge – and the opportunity – for South Sudan

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