Enabling that goal is the objective behind the Business and Biodiversity Assessment report, a first-of-its-kind publication released on February 9 by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), an independent organization created in 2012.

A product of nearly three years’ work by 80 scientists and private-sector experts, the report was endorsed this month by representatives of the more than 150 IPBES member countries at a week-long plenary session in Manchester, United Kingdom. It is intended to serve as a key reference on nature-related risks for business – and how alleviating those risks hinges on policy change by governments.

“From my perspective, it plays a role for nature similar to what the [Intergovernmental Panel on Climate Change] has played for climate change,” says Thomas Walker, special projects lead at the Institute for Sustainable Finance at the Smith School of Business, Queen’s University, in an interview with Corporate Knights. “Canadian business leaders should pay attention because of Canada’s resource-based economy and because nature underpins the productive capacity of said economy.”

Stark warning

The report begins with a stark warning to businesses: they can either lead transformative change or “risk extinction.” The authors cite evidence of significant declines over the last 50 years in many categories of the natural “ecosystems services” on which business and economies depend. This includes things like raw materials from nature, pollination and seed dispersal, air and water quality, soil fertility, and amenities for tourism and recreation. Altogether, they underscore just how much business is at risk from nature’s collapse. The report presents a detailed guidebook of more than 130 actions that companies, along with policymakers and other enabling actors, can take to reverse it.

“What’s really fundamental here is that our experts looked at the methods and approaches that are available to understand what [risk from biodiversity loss] means in an individual business context. How you can, as a business, understand your exposure to that. How you measure your impacts and dependencies and therefore how you can understand your risks,” said Matt Jones, one of three report co-chairs and a senior officer at the UN Environment Programme, at the launch press conference.

The report’s release (for now, just the policy summary, with remaining chapters to follow in a few weeks) was well-timed, coming just one week before governments convened in Rome from February 16 to 19 to begin the first global review of nature action under the Kunming-Montreal Global Biodiversity Framework (GBF) since it was created in 2022. Mark Carney’s Liberal government is also expected to soon unveil its revised 2030 Nature Strategy, replacing the previous Nature Accountability Bill that failed to pass before the last election. The new strategy will spell out how Canada intends to meet its commitments under the GBF to halt and reverse biodiversity loss and protect 30% of lands and waters by 2030.

In an email to Corporate Knights, Samantha Bayard, a spokesperson for Environment and Climate Change Canada, emphasized the role of nature disclosure in addressing the role of business in biodiversity loss. “While adoption of nature-related disclosures is still at an early stage in Canada – hindered by, for example, capacity, expertise, and data limitations – a growing number of companies and municipalities have begun to address nature-related risks in their portfolios and integrate natural assets (e.g., wetlands) into their financial disclosures.”

Delivering transformative change

A core tenet of the GBF is that reversing biodiversity loss requires the “involvement of all society,” including companies. Significantly, among the GBF’s 23 targets is a call for government action to encourage and enable companies to better manage their impacts on nature and more accurately assess – and disclose – their risks and dependencies. Both sides of that equation are squarely addressed in the new IPBES report.

For businesses, it lays out actions at four decision-making levels: corporate, operational, value chain and portfolio. Asked to suggest some critical first steps, report co-chair Ximena Rueda, dean of the School of Management at Universidad de los Andes in Bogotá, Colombia, urged companies to choose their battles. “What is their highest dependency [on nature] or highest impact? Start from that.”

Government’s responsibility

However, the report also makes clear that voluntary efforts alone won’t be enough to deliver the kind of “transformative change that will halt and reverse biodiversity loss,” added co-chair Stephen Polasky, professor of ecological and environmental economics at the University of Minnesota. That will occur only if governments also step in “to change the set of conditions in which businesses operate.”

A key target here are the massive subsidies currently directed toward business activities that drive biodiversity loss. In 2023, according to the report, subsidies of US$2.4 trillion contributed to the estimated US$7.3 trillion in public and private finance flows that had direct negative impacts on nature. In contrast, just US$220 billion in private and public funds were directed to the conservation and restoration of biodiversity. “There is a big role here for governments and the financial system to provide incentives for business to do actions that are beneficial for biodiversity and to take away incentives to business to do actions which are harmful,” Polasky said.

The challenge of subsidy reform

According to the ISF’s Walker, the report’s concern about harmful subsidies “resonates” in Canada. Government fiscal and tax policies designed to encourage resource development and production have often failed to reflect environmental externalities or cumulative ecological impacts, he says.

While reforming subsidies will be “politically complex,” Walker says there is nothing to stop Canadian companies, which have “ample experience with climate disclosure frameworks,” to immediately start considering biodiversity in corporate decisions and disclosures. The disclosure framework established by the Task Force on Nature-Related Financial Disclosures in 2023, which is now being implemented through the work of the International Sustainability Standards Board, provides a blueprint for companies and their boards to follow.

“Structured disclosure can help integrate biodiversity into enterprise raisk management,” Walker explains. “Once nature dependencies are identified and quantified . . . they can be considered alongside climate, market and operational risks.”

Brian Banks is a writer in Cobourg, Ontario, who specializes in environment, business and sustainability.

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Yesterday, representatives of 185 countries officially agreed to launch a new fund to ramp up investment in meeting major global biodiversity goals.

The new Global Biodiversity Framework Fund (GBFF) was ratified at the Global Environmental Facility’s (GEF) seventh assembly in Vancouver, Canada, with wildfires in British Columbia as a backdrop. This comes after global delegates at the U.N. biodiversity conference (COP15) committed last December in Montreal to meet a set of goals inked into a Global Biodiversity Framework. This framework is designed to help halt and reverse biodiversity loss and put nature on a path to recovery by 2030.

The fund will mobilize and accelerate investment from governments, philanthropy, and the private sector to support nations in the conservation and sustainability of wild species and ecosystems whose health is threatened by wildfires, flooding, extreme weather, and human activity, including unsustainable industrial agriculture, consumption and production pressures, and urban sprawl.

According to an in-depth assessment by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, or IPBES, in 2019, one million species of plants and animals face extinction.

“The creation of this biodiversity fund is a game-changer for countries’ ability to protect, restore, and ensure the sustainable use of nature,” said Carlos Manuel Rodríguez, GEF CEO and chairperson, in a meeting last month.

So far, two countries announced initial contributions to start the fund’s capitalization and support budget-stressed industrially developing countries, many of which are some of the most highly biodiverse in the world. This included $146.8 million (CA$200 million) from Canada and $12.58 million (£10 million) from the United Kingdom.

Canada’s Minister of International Development also announced the country is providing an additional $16.75 million (CA$22.8 million) in funding for the GEF’s eighth replenishment to support global efforts to tackle the triple planetary crisis of climate change, biodiversity loss, and pollution.

As much as 20% of funds from the GBFF is targeted to support Indigenous and local action to protect and conserve biodiversity, and at least 36% of the fund’s resources are aimed to support the most vulnerable people, small island developing states, and least developed countries. About 25% of the fund will be delivered through selected international financial institutions to increase resources through private sector involvement and ensure policies are streamlined.

Indigenous organizers around the U.N. biodiversity convention, known as the International Indigenous Forum on Biodiversity (IIFB), welcomed the target of 20% of funds directed to Indigenous peoples and local communities (IPLCs). Indigenous organizations frequently report being sidelined in receiving biodiversity and climate funds.

“The approval of this trust fund with a specific commitment to Indigenous peoples and local communities motivates and gives us hope that support will be achieved for the efforts to conserve biodiversity at local level,” said Lucy Mulenkei, co-chair of the IIFB and member of the Indigenous advisory group to the GEF, while speaking at the assembly.

The Global Biodiversity Framework adopted in Montreal last year recognizes the role and rights of IPLCs in the conservation of biodiversity in their lands and territories. Several targets also highlight their full and equitable participation in decision-making in the implementation of the framework.

This fund also provides an increase of support to the least developed countries and small island developing countries who are among the most vulnerable regions to the impacts of biodiversity loss and climate change.

To meet the ambitious biodiversity targets, countries need a substantial increase in resources, as was recognized by COP15 and in related decisions on resource mobilization and the financial mechanism. The Montreal agreement seeks to raise international financial flows from developed nations to developing countries to at least $20 billion per year by 2025 and to at least $30 billion per year by 2030. However, this is far shorter than the total some industrially developing countries desired, with some parties like the Democratic Republic of Congo calling for a total of $100 billion a year.

Agreement on these financial matters, from the amount of funds allocated to how they should be distributed, was the most difficult part of the negotiations in Montreal.

The GBFF will provide an opportunity to receive funding from all sources quickly disburse through streamlined procedures, said David Cooper, acting executive secretary of the Convention on Biological Diversity, in a statement.

Additional resources will need to be mobilized from domestic sources at all levels of government, the private sector, and innovative mechanisms.

“We are off to a good start. We now call for further pledges from countries and from other sources so that the first projects under the new fund can be launched next year ahead of COP 16 [the next U.N. biodiversity conference],” he said.

While some human rights and environmental activists welcome the first commitments to the GBFF, they say contributions so far fall short by $40 million to make the fund operational. The initial contributions for the GBF Fund are set at $200 million from at least three donors by December 2023, while current contributions by Canada and the U.K. total approximately $160 million.

The GEF Council should also take immediate action to allocate these funds to Indigenous groups to continue conserving biodiversity, said Avaaz, a global human rights group, in a statement. In addition, these pledges should turn any “aspirational” share of funding for Indigenous groups into a firm target of the agreed 20% share.

The GEF’s seventh assembly ends on August 26 and delegated may convene again in four years.

Over the past three decades, the GEF has provided more than $22 billion and mobilized $120 billion in co-financing for more than 5,000 national and regional projects.

This article was first published by Mongabay. 

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In the newsrooms and watering holes of Phnom Penh, the two expressions were read as a telling contrast between “nice guy who’s trying” and “Nobel Peace Prize winner.” If these two Southeast Asian reformers represented the best hopes for their troubled countries, most would have put their money on Suu Kyi and Burma. Cambodia was just three years removed from a historic United Nations-sponsored election, but it was already sliding into what one scholar notably described as a “vaguely communist free-market state with a relatively authoritarian coalition ruling over a superficial democracy.”

Burma, on the other hand, still seemed to have a political future worth looking forward to (even if it was under the name Myanmar), and the unexploited economic potential to back it. Suu Kyi’s infallible, principled resistance to the thuggish junta made her country a cause célèbre and appeared certain, even then, to put it on track for better things.

Just two years ago, that promise finally felt within sight. Isolated and aging, Burma’s military leadership had begun implementing its “roadmap to democracy,” with reformer Thein Sein emerging as the first civilian president in decades. Suu Kyi and other dissidents were released; she won a seat in parliament and toured foreign capitals in a blaze of publicity and optimism. Ordinary Burmese gained impressive new freedoms and the doors were thrown open to liberalization, investment, currency regulation and the end of foreign sanctions.

To hear their stories told this way, these two countries appear to have emerged from economic and social ruin in very different shape. But while Burma still has prosperous potential, it’s treading perilously close to Cambodia’s path – cronyism, corruption, land grabs, social and environmental exploitation. In the short time since the easing of foreign sanctions and Suu Kyi’s triumphant foreign tour in 2012, elements of “reformed” Burma have begun to resemble that ugly characterization of its neighbour. It may yet end up taking the wrong path unless its foreign partners, including Canadian investors and political leaders, show the resolve to demand better.

Land grab

If a single word can be used to sum up what’s animating the economic and political transitions of both Cambodia and Burma, it is “land.” Cambodians and now Burmese have emerged from their isolation with severely underdeveloped economies and labour forces that will require generations to rebuild, but the value of their underdeveloped land, and what can be extracted from it, is real and immediate.

The paranoid Khmer Rouge shattered the lives and livelihoods of millions of Cambodians, but its experiments in agrarian socialism had the effect of a perverse form of environmental conservation. Burmese military rule left a larger footprint – black-market logging, destructive gem mining and a cavalier attitude toward delicate ecosystems – but much of the country’s prime land emerged underexploited due to sanctions, civil war and the sleepy pace of its ox-cart economy. The sudden embrace of open markets, growth and resource exploitation has inevitably created Wild West conditions in the rush to exploit these two Far Eastern “frontier” states, along with tiny Laos.

Despite years of advocacy by international NGOs, illegal timber exports continue to significantly erode the forest cover of all three countries to feed the needs of neighbouring Thailand and China. In past decades, this trade fuelled civil conflict; today, it largely benefits Burma’s powerful military and business elites, working with the regional rubber firms that have been sweeping across Southeast Asia, acquiring land for plantations to feed global demand.

Resource extraction, which was a tricky business for Western firms in Burma under the watchful eyes of sanctions and Western public opinion, is proceeding apace, with all that entails. Gems and precious metals continue to leave a particularly dirty stain. Working conditions have been widely deplored and the infamous Letpadaung copper mine has tripped up many of those involved in the project – from former Canadian partner firm Ivanhoe, which remains locally reviled, to Suu Kyi, who headed an official committee that allowed the project to proceed against the wishes of local villagers.

Meanwhile, Burma’s government is pushing ahead with a panoply of energy projects, auctioning off oil and natural gas rights to multinational firms and advancing plans for dozens of new hydroelectric dam projects. For a country with chronic power shortages, this should be a no-brainer, but most of the new capacity is for export and the environmental and social costs of the infrastructure have been exorbitant.

Next Cambodia?

Consider the massive Myitsone Dam project at the headwaters of the Irrawaddy River, intended to generate up to 6,000 megawatts of power, most of it for the Chinese province of Yunnan. Thousands of Burmese were forcibly relocated and experts warned of widespread environmental and cultural destruction before the government suspended the project, citing local sentiment. With the government under intense Chinese pressure, it would hardly be a surprise if construction resumes following next year’s elections.

With weak regulations and enforcement practices, immense environmental and human consequences are already evident elsewhere in Burma. Villagers, farmers and remote tribes with traditional land claims, but no formal title, have been forcibly relocated or marginalized with little compensation or sympathy, and the country’s vaunted biodiversity is under threat due to habitat loss and the trade in endangered species. Black-market logging has been reorganized and legitimized through Rangoon-area ports, which observers believe allows for the “laundering” of logs illegally cut in disputed or ethnic-conflict areas – one of the issues fuelling conflict between the government and ethnic minority groups. Even the feel-good tourism industry, which has developed at breakneck speed, has brought unexpected costs, including environmental damage and overdevelopment at Inle Lake, a world-renowned tourist attraction even in the bad old days.

There are many similarities to Cambodia, where land grabbing, forced relocation, exploitative work conditions, corruption and ethnic strife are familiar parts of the landscape.

Burma “stands at a crossroads,” says Ali Hines, a campaigner with British-based environmental NGO Global Witness, which has done high-profile work in both countries for years. “Either it can continue down the path of its neighbours – whose limp efforts at reform do little to mask a de facto policy of land grabbing and cronyism – or it can use its natural resources to drive the sort of equitable national development that is needed to set the counter on a more stable, more sustainable course.”

Getting it right

For Canadians who have or want a stake in Burma, these trend lines should be cause for concern.

Will nascent reforms, such as transparency in oil and gas contracts, be strengthened and enforced, or allowed to wither on the vine? Will effective legislation be passed to properly and fairly establish land title and regulate its use and sale? Will pervasive cronyism and corruption be allowed to flourish? Will consultation and popular will play a greater role in weighing the fate of mega-projects like the Myitsone Dam? Will restrictions on Suu Kyi’s path to the presidency, currently blocked by junta-era legislation, be lifted – or have her principles and promise merely been co-opted by a junta with a friendlier face?

The answers to these and other questions are not yet certain. But this is where the outside world Burma has been courting – including Canadian investors, political leaders and even the public – can make a difference.

Like the leaders of many emerging quasi-democracies, Burma’s government, military and oligarchs are walking a fine line with their foreign suitors. In essence, they say: In order to make money with you, we will undertake an amount of reform that satisfies your business and political requirements.

So how badly do we want to make money with Burma? And what amount of reform will satisfy our standards? These are the international community’s bargaining chips.

In Cambodia, where reform has gone so badly off the rails, growth has been high but the amount of money to be made was still relatively small (its economy is defined by agriculture, tourism and low-cost labour). But international standards for reform were similarly low. The defining issue for Cambodia’s foreign suitors was justice for victims of the Khmer Rouge regime, responsibility for which was tangled in regional rivalries and Cold War politics. Prime Minister Hun Sen, in power for nearly 30 years, has a singular talent for delay and obfuscation, and the Khmer Rouge tribunal process has been dispensing justice in a slow trickle for more than 15 years now – just fast enough to keep foreign aid and investment on the hook.

Bar set low

There is no similar defining issue to distract the international community in Burma. But the amount of money to be made is much higher than it was in Cambodia. The Burmese economy is already twice that size, with a much richer resource base and four times the population. And Burma’s sanctions-era business partners (Thailand and China, notably) set a very low bar for reform. Can Western firms with checkered records of their own, such as Canadian resource companies, be counted on to raise it?

“Canadians and Canadian companies are urged to remain vigilant and ensure that they engage with individuals and companies of the highest ethical standard … it remains the responsibility of individual companies to ensure their activities are within legal parameters and beyond reproach with respect to integrity,” Foreign Affairs Minister John Baird and International Trade Minister Ed Fast advised in 2012, as Canada announced its intention to open an embassy in Burma.

To that end, international money has largely been concentrated in high-profile industries such as oil and gas, tourism and telecommunications – foreign investments “are largely contracted on the basis of intentional standards where transparency is not a problem,” says Derek Tonkin, a former British diplomat who now serves as an adviser to investment firm Bagan Capital.

But sustained change will take time and commitment by both investors and governments. Before they make their money, Burma’s new foreign partners need to demand more: clear, fair rules for foreign investment and domestic politics; the disavowal of cronyism and corruption, official and unofficial; consideration of social and environmental impacts of potential investment projects; incorporation of best practices and corporate social responsibility; understanding and accommodation of local context, culture and relationships.

Although some (including Burmese-Canadian democracy advocate Tin Maung Htoo) have argued that the threat of sanctions should be maintained, it’s clear that Burma is now open for business. Economic opportunities abound and Canadians can no longer be expected to stay out on principle or nervousness at dealing with what remains an unsavoury regime. But as they engage, they need to keep pushing back. They could start by asking what kind of Burma they want to deal with in the future: another Cambodia, or something better?

Guy Nicholson is deputy comment editor at The Globe and Mail. He was foreign editor and managing editor of The Cambodia Daily in Phnom Penh from 1996 to 1999. 

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Fresh off of Alibaba’s record-breaking IPO-dominating headlines this week, co-founder Jack Ma was interviewed by Chelsea Clinton at the Clinton Global Initiative’s annual meeting yesterday. Ma spoke at length about his desire to put his swollen bank account to charitable use, returning repeatedly to ongoing environmental problems in China. “If we don’t give up, in 15 years China will have a change,” he said. “We will have blue air, blue skies, clean water.” Former President Bill Clinton, for his part, hailed it as a potential catalyst for increased civic engagement in China.

The freshly signed Canada-China Foreign Investment Promotion and Protection Agreement (FIPPA) remains a hot-button issue. Andrew Nikiforuk is worried that clauses in the 31-year treaty would empower it to supplant decisions made by Canadian provincial, judicial and First Nations on issues of resource development. The treaty goes into effect on October 1.

Corporate Knights contributor Stephen Lacey wrote about new California-based startup Local Motion, which is working to make fleets more efficient. The sharing platform helps companies make the most of corporate vehicle fleets, working with large companies such as Google and Verizon. On Greentech Media’s The Energy Gang podcast, Lacey went into detail on New York State’s ambitious plans to incorporate more entrepreneurship and choice into the state grid. It’s well worth a listen.

The United States government has launched its largest conservation program to date to restore the Great Lakes and clean up 10 contaminated rivers and harbors. The five lakes represent the largest group of freshwater lakes in the world, but the growing cities along their shores have chased away wildlife. Farming is also responsible for filling rivers with fertilizers result in massive algae blooms that cover parts of the Great Lakes, while mussels and other invasive species are killing native fish and other species. The Environmental Protection Agency aims to treat eight times more urban runoff and restore twice as much wetland and wildlife habitats. It will also double the area that it is attempts to control for invasive species and reduce fertilizer runoff by more than 1,400 tons by 2019.

The post September 25, 2014 appeared first on Corporate Knights.

A new scientific analysis shows that not only bees, but other pollinators and animal life, are suffering from the use of neonicotinoids, and scientists are calling on governments to intervene. The European Commission has already banned the pesticide for two years, while the U.S. has announced the creation of an inter-agency task force to protect pollinators. In Canada, a lack of federal action has forced local governments into taking the lead.

The Task Force on Systemic Pesticides, made up of 29 scientists from around the world, analyzed over 800 peer-reviewed studies published in the last five years—including industry sponsored ones. They found that neonicotinoids were largely responsible for honeybee declines and posed risks to other pollinators and animals, such as birds, earthworms, butterflies and aquatic life.

Neonicotinoids are used on staple crops, such as corn and soybeans, as well as annual and perennial plants sold at garden centres and green houses.

As of August 2013, Health Canada’s Pest Management Regulatory Agency had received 79 reports from more than 322 different bee yards that honeybees were dying with symptoms typical of pesticide exposure, such as twitching and inability to fly. These reports coincided with the planting of corn and soybean crops treated with insecticides.

“More than 20,000 known species of bees serve as the lynchpin of a global pollination ecosystem that also includes hummingbirds, beetles, flies, moths and many others,” Jeremy Runnalls, Corporate Knights’ managing editor reported last January.

The United Nations Food and Agriculture Organization says that 80 percent of flowering plants and 35 percent of the world’s crops are reliant on pollinators for production.

A joint study by the U.S. Department of Agriculture and the U.S. Environmental Protection Agency in 2013 pointed to parasites and disease, poor nutrition and a lack of genetic diversity in bee colonies as potential contributors to honeybee deaths.

Instead of focusing on neonicotinoids, Monsanto, Bayer and other agrochemical companies have listed these other factors as potential reasons for the decline in honeybees..

Even so, Home Depot’s vice president of merchandising and sustainability, Ron Jarvis, announced last week that the company would require its suppliers to label plants dosed with neonicotinoids by the end of the year. The company will also conduct tests to see if it is possible to raise healthy plants without using the pesticide.

But, as Corporate Knights reported last December, labeling may not be enough as consumers are confused by the different symbols they are expected to recognize.

“We can now clearly see that [neonicotinoids]…pose a risk to ecosystem functioning and services which go far beyond concern around one species and which really much warrant government and regulatory attention,” said Maarten Bijleveld van Lexmond, chair of the task force, in an online statement.

Indeed, the WIA analysis makes it clear that political action is needed to protect honeybees and other pollinators and to bring the negative effects of neonicotinoids under control.

The European Commission restricted the use of three pesticides belonging to the neonicotinoids family starting in December 2013 for two years or until more information becomes available.

Syngenta, a company that makes the pesticide, withdrew its “emergency” application today to use the neonicotinoids on canola crops in the E.U. Almost 250,000 people protested through online petitions and letters, reported the Guardian. But, the company says it withdrew because the Commission did not approve the application with enough time to distribute the product to farmers for this year’s growing season.

A memo issued by the White House last Friday said that a new inter-agency task force has been charged with drafting a strategy to protect pollinators, such as honeybees, butterflies and bats. At President Obama’s request for federal agencies to take action to advance the health of honeybees and other pollinators, the U.S. Agriculture Department promised US $8 million in incentives to farmers and ranchers who are willing to build new habitats for honeybees.

But in Canada, local governments are taking the most aggressive action to protect their honeybees.

The Prince Edward County council in Southern Ontario passed a resolution last May that banned the use of neonicotinoids and asked the federal government to put a moratorium on the pesticide until further research could be conducted.

Sam Merulla, a city councillor in Hamilton, Ontario will ask city council this month to meet with McMaster University, the Royal Botanical Gardens and the Ontario Beekeepers Association to figure out how to deal with this problem. Banning the pesticide is on the table.

By comparison, the Canadian government has avoided placing a moratorium on neonicotinoids. Instead, it has released planting guidelines for corn and soybeans to minimize honeybee exposure to the pesticide. The recommendations include reducing dust from the coated seeds, using safer planting practices, cleaning equipment, and improving labeling for seeds treated with the pesticide.

The government will monitor the 2014 growing season and evaluate the outcomes of the recommendations. Health Minister Rona Ambrose called the research done by Health Canada on this matter “inconclusive,” as reported by the CBC.

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That’s unfortunate, as the world is starting to run low on fresh water. Less than 1 per cent of the planet’s fresh water is available to a human population that keeps growing. With more than seven billion people relying on access to this life-giving liquid, it’s no wonder the International Monetary Fund has called water scarcity the second most important risk to world stability.

For the oil-rich arid lands of the Middle East, water scarcity has been a portentous reality for the past decade with underground aquifers being sucked dry for agriculture use and tensions over water distribution simmering underneath diplomatic smiles. Already, 80 per cent of the world’s 15 most water-scarce countries are located in the Middle East, with the Gulf region being the hardest hit.

“The Middle East and North Africa (MENA) region is considered the most water-scarce region of the world. As the region’s population continues to grow, per-capita water availability is set to fall by 50 per cent by 2050,” predicts a 2011 water outlook report from the World Bank.

With populations forecasted to rise from the current 360 million to 600 million by 2050, and such bleak expectations for water, the Middle East has been scrambling to find effective ways to deal with the rising demands on this precious resource. If the region isn’t able to meet the swelling need for roughly another 50 to 60 billion cubic feet of water annually, more MENA countries will be added to the list of the world’s most parched nations.

Because of these pressures, governments have increasingly turned to desalination, a technology that has been used in the Middle East since the 1950s. Historically expensive and often harmful to marine life, the use of desalination hasn’t helped the climate either. In this region, countries have typically used fossil fuels (mostly oil and gas) to generate the energy needed to turn seawater into salt-free drinking water.

Globally, desalination plants are now being used in 150 countries, including Australia, China and the United States. Over the past five years, the number of plants has jumped by 57 per cent to nearly 16,000. According to the International Desalination Association, the capacity of desalinated water rose 276 per cent to 6.7 billion cubic metres a day between 2001 and 2011, with more than half of that capacity located in the Middle East. That kind of growth is expected to continue, if not accelerate.

Christopher Gasson, publisher of Global Water Intelligence, estimates that around 1 per cent of the world’s population is currently dependent on desalinated water. “But by 2025, the UN expects 14 per cent of the world’s population to be encountering water scarcity,” he recently wrote.

The Middle East is particularly vulnerable. Economist Jeff Rubin, author of the best-selling book Why Your World is About to Get a Whole Lot Smaller: Oil and the End of Globalization, says fresh-water underground aquifers in countries like Saudi Arabia are down 50 per cent from the levels of the mid-1990s.

“In Saudi Arabia, water use is seven times its sustainable level. And it’s not just the Saudis,” Rubin said in an interview. All of Saudi Arabia’s neighbours are rapidly running through their supplies. “The Emirates and Dubai water use is 15 times that of sustainable levels, while Kuwait runs at over 20,” he said.

The hidden cost of desalination

Desalination can help, but Rubin says that in the Middle East the true cost is most often not reflected in the final price of de-salted water, which takes tremendous amounts of energy to produce. Another problem is the type of energy that’s frequently used: oil.

Every year, Rubin said, the Saudis go through about 700 billion cubic feet of its water in aquifers, and to make up for such usage, they desalinate by burning roughly 300,000 barrels of oil (and less frequently, natural gas) a day.

“Desalinating that immense volume of water could ultimately require the use of a million barrels of oil per day,” Rubin explained. “To put that in perspective, peak water will hasten peak oil.”

The two desalination techniques most used – thermal and membrane – are energy hogs. Thermal desalination, the most popular method in the Middle East, vapourizes seawater through reduced atmospheric pressure to free it of impurities. With membrane technology (or reverse osmosis) water is forced through a membrane at about 800 pounds per square inch to filter out the salt and other impurities. While this approach is preferred in the West, it is also gaining favour in the Middle East.

According to a report from the Pacific Institute, desalination plants on average use about 15,000 kilowatt-hours for every million gallons of fresh water produced. So when oil is burned to produce electricity for this process, significant pollution and climate-warming emissions result. A warming climate, of course, is expected to make fresh water even scarcer, creating a need for more desalination requiring even more energy – an unsustainable cycle.

With about 120 desalination plants operating in the region and a forecasted increase in the worldwide market for desalinated water, more research has gone into understanding the negative environmental consequences of such a process.

Gidon Bromberg, executive director of environmental organization Friends of the Earth Middle East, said the impact goes beyond energy and emissions. “The most direct environmental impact is from the release of brine back to the oceans,” he said. “From a single plant it may be insignificant but we really don’t know what the accumulated impact is yet.” With the rise of desalination plants in the region it’s not known what it will do to the Mediterranean Sea, he added.

“Today’s desalination technologies can basically remove half of the water from the original amount of seawater and make it drinkable. That means the other half is sent back to the oceans and it’s twice as salty,” explained Brent Haddad, professor of environmental studies and director of the Center for Integrated Water Research at the University of California. When this highly concentrated saltwater returns to the ocean it is more than the local sea life can tolerate. This, he said, has negative effects on ocean biodiversity.

For a country like Israel, environmentalists also fear that increasing use of desalination will simply act as a disincentive for the population to conserve water. Israel currently desalinates about 315 million cubic metres of seawater a year – roughly half the public’s domestic water demand – and it plans to expand that volume to 750 million by 2020.

“We’ve seen a dramatic reduction in advertising in water conservation. We’re not against desalination as a technology, we just think getting 350 million cubic metres is enough,” said Bromberg, adding that he recognizes the need to guarantee minimum supply for domestic security purposes.

Water conservation leads to energy conservation, which can lead to reduced pollution and emissions. It’s all connected. There are no plans to use renewable energy for power at the moment in Israel, said Bromberg, “but if the government were to adopt solar as the energy source (for desalination) then our concerns would decrease dramatically.”

A greener way forward

It may not have taken form yet in Israel, but there have been many developments in the Middle East aimed at ensuring more sustainable, lower-carbon approaches to desalination. In the United Arab Emirates, a company called Masdar – a subsidiary of Abu Dhabi government-owned Mubadala Development – has introduced a pilot program to build the first large-scale desalination plant that runs on renewable energy.

Sultan Al Jaber, the company’s chief executive officer, told attendees at this year’s World Future Energy Summit that the plant could run on one or multiple forms of green energy, but the approach is likely to include solar.

“We’ve calculated it would take anywhere between 50 and 200 square metres of solar panels to power one cubic metre of desalination per day,” said Corrado Sommariva, president of the International Desalination Association and a collaborator with Masdar on the pilot project.

According to a 2012 report by Ventures Middle East, Saudi Arabia and other members of the Gulf Cooperation Council have also joined the renewables bandwagon. They have agreed to implement a $100 billion plan between 2011 and 2016 to improve desalination technologies to power state-run plants currently guzzling around 1.5 million barrels of oil per day. The idea is that oil would be replaced by solar and wind energy.

“A sustainable future means renewable power with the desalination technology able to perform optimally. We will certainly see more desalination in the future. And if the energy cost of renewables goes down then it will really accelerate – it’s just waiting for that next technological breakthrough,” said Haddad. For the reverse osmosis approach it’s a question of science: on how to use less water pressure for the process, which can potentially reduce the cost of desalination through improvement of membrane performance.

The problem with the future, however, is that it’s not today. Water scarcity in the Middle East is a current event, and efforts are needed now to address a resource issue that has and continues to be a source of regional tension.

As the political chaos following the Arab Spring starts to settle down, the threat of declining availability of water in the region may once again awaken dormant conflicts between countries depending on the three major rivers in the region: the Tigris-Euphrates, Nile and Jordan.

“Wars can erupt because of water,” Mohammed Khalfan al-Rumaithi, director-general of the UAE’s National Crises and Emergency Management Authority, recently told the country’s government leaders.

Evolving conflicts have acted as catalysts for some of the region’s wars, such as the 1967 War and the Iran-Iraq War, and may continue to aggravate more crisis zones in the near future. Already, visible tensions are palpable between Egypt, Sudan and Ethiopia over the Nile; Turkey and Syria over the Tigris-Euphrates; and Jordan, Israel and Palestine over the Jordan River Basin, which also flows through Lebanon and Syria.

Concerning the Jordan basin, desalination has great potential to calm tensions in the area. A 70 million cubic metre desalination plant planned for Aqaba, Jordan, is expected to supply water to both Aqaba and Eilat on the Israeli side, according to Bromberg. In exchange, Israel would provide additional water from the Sea of Galilee to Jordan.

“We believe that cooperation that has mutual benefits, especially over something like water, is very important for peace building in the region,” says Bromberg.

But the path forward must also include desalination that doesn’t rely on fossil fuels, or else collective efforts will ultimately be undermined. If desalination is going to help keep peace in the region and, at the same time, not add more fuel to the climate fire, then renewable energy will need to play a much greater role.

The post Desal nations appeared first on Corporate Knights.

With the 1959 opening of the St. Lawrence Seaway linking Montreal’s ports to Lake Ontario, the lakes opened to the rest of the globe. Today, annual shipping exceeds 200 million net tonnes; almost a quarter of that travels to and from overseas ports.

As a result, the region is now the world’s fourth-largest economy. With a GDP of $4.7 trillion, the Great Lakes account for 28 per cent of combined Canadian and U.S. economic activity, according to a 2013 report from BMO Nesbitt Burns. Manufacturing is the top industry.

That makes the region particularly vulnerable to global economic volatility, but it also faces a more insidious risk: climate change. The symptoms – low water levels, extreme weather conditions and invasive species – threaten not only the Great Lakes, but also its businesses and people.

Lower lakes, lower revenues

Huron and Michigan’s levels have been below average for the past 14 years, and in January 2013 both lakes reached record lows. Ontario, Erie and Superior also face persistent low levels.

Gail Krantzberg, professor of civil engineering at McMaster University in Hamilton, Ontario, says climate change is part of the reason. “There’s less ice cover in winter, and you get evaporation in the winter months that is not compensated for by [rain] in the summer months. You also get snow packs that melt in the middle of winter, so there’s no spring meltwater, and that lowers levels even more.”

These conditions “are a direct threat to manufacturing in the Great Lakes,” says Ed Wolking, president of the Great Lakes Manufacturing Council in Detroit. He says they also challenge the $33.5 billion commercial navigation industry.

That’s because there is now less clearance at key transit points on the lakes, forcing ships to reduce the amount of cargo they carry. This is concerning in part because shipping is more fuel-efficient than rail and truck delivery per tonne of cargo.

The Lake Carriers’ Association (LCA) estimates for every inch of water drop, its 57 ships have to leave behind 8,000 tonnes of cargo – enough iron ore to produce steel for 6,000 cars. What’s more, “Vessels are reducing loads by an average of 15 per cent per trip to avoid scraping the bottoms of harbours and channels,” says the LCA.

Wolking adds, “A ship that would make 50 trips a year would incur extra costs of $2 million a year from operating at a depth shortfall of 24 inches. Consumers and manufacturers will pay for it in the end.”

Manufacturing operations also suffer. “If a [factory] has a near-shore water intake, [it could be] high and dry now,” says Stephen Carpenter, director of the Center for Limnology (a term for freshwater science) at the University of Wisconsin. “They’d have to build the pipe out further or deeper, and that costs money.”

Lower lake levels also threaten local tourism, which rakes in $12 billion annually, and fisheries, a $7 billion industry. A consortium of Georgian Bay mayors in Ontario says cottagers will have to spend $500 million to extend and repair docks and water systems. Marinas have to dig up sediment, or dredge, to maintain enough clearance for boats. And businesses that rely on a thriving waterfront suffer when harbours dry up.

Commercial and recreational fishers can’t go as close to shore as they used to, which reduces the types and number of fish they can catch. Those who risk it can damage their boats when bottoms hit shore.

Flooding the supply

Not only are the Great Lakes now chronically low, but when rainfall comes, too much comes down on water systems too quickly. In June 2012, about 10 inches of rain fell over northeastern Minnesota in less than 24 hours, causing more than $100 million in damage. Then, in July 2013, a record-breaking five inches fell on Toronto in seven hours, cutting power to 500,000 people.

According to reinsurer Munich Re, such extreme weather events aren’t going away. From 1980 to 2011, they became more frequent in the United States. Such storms cause massive flooding, and are exacerbated in major cities because asphalt surfaces don’t absorb water. Instead, rain must flow into storm drains, further overwhelming infrastructure. “That releases sewage back into the lakes,” says Krantzberg. “There’s economic burden for municipalities, households, businesses and insurance companies when basements get backed up with sewage, for example, or when entire bridges get washed away.”

And in rural areas, heavy rains wash soil and fertilizer into lakes. Trouble is, that runoff includes phosphorus, which boosts algal growth. Too much algae clogs water intakes, imbalances fish populations and irritates people’s skin. That drives away tourists, and challenges recreational and commercial fishers.

“Storm events are going to transport more nutrients into the lakes and lead to more algal bloom, coastal pollution and water quality problems,” says Carpenter. “That means the water drawn needs to be [more heavily] treated, which is expensive.”

In 2011, Lake Erie experienced its worst bloom in decades – it covered a fifth of the lake. Boats had to slow down when driving through the toxic, neon-green scum, reports news service EcoWatch.

Unwelcome guests

Climate change and carelessness have caused more than 180 non-native species to settle in the Great Lakes. “As the lakes warm, some species that couldn’t handle the deep cold waters now can,” says Krantzberg. And as global trade increases, so do the number of international ships and the number of foreign species hitching rides.

These species have caused declines in almost 46 per cent of local endangered plants and animals. One invader, the common reed, has grown so densely on shorelines that birds can’t nest and fish can’t move, says Mary Muter, chair of Sierra Club Ontario’s Great Lakes section.

And invasive fish and animals disrupt the food chain, meaning native species may not get enough to eat. Recreational and commercial fisheries suffer if their usual catch disappears.

“Salmon are valuable both for sport and commercial fishing, but the entire [Chinook salmon] fishery is now dwindling” in Lake Huron, says Carpenter. “To some extent that’s being replaced by inshore fishing of walleye and yellow perch, but that means the industry [has to] retool.”

Invaders can also cause problems for municipalities and manufacturers. Zebra mussels arrived in Lake St. Clair in the late 1980s via transoceanic ships. The crustaceans like to colonize intake pipes, clogging them. Controlling this costs $250 million each year, according to the University of Wisconsin. Worse, the U.S. Geological Survey estimates the mussels cause “billions in damage annually to boats, docks, hydroelectric systems and other vital infrastructure.”

And scientists are concerned about a potential invader: Asian carp. The carp make up 95 per cent of fish in some parts of the Illinois and Mississippi Rivers. They breed quickly and eat voraciously. Silver carp can leap as high as 10 feet out of the water when disturbed, damaging property and injuring people.

The carp haven’t yet reproduced in the Great Lakes system, but if they do, they could devastate native fish populations, and thus the combined $23 billion fishing and recreation boating industries. Recognizing that, in 2002 the U.S. Army Corps of Engineers built electronic barriers in the Chicago Area Waterway System to prevent migration of the carp from the Mississippi River to Lake Michigan.

Such initiatives aren’t cheap. The barrier cost $9 million to erect and $47 million to maintain in 2011. In total, the U.S. government has invested more than $200 million over four years in anti-carp measures. As part of that, in July 2013, the government will spend $51.2 million to upgrade existing barriers and construct new ones.

Completely dividing the two waterways could cost up to $9.5 billion, finds a 2012 report from the Great Lakes Commission and the Great Lakes and St. Lawrence Cities Initiative.

Solutions: mitigation, adaptation

The threats facing the Great Lakes magnify each other, so mitigation requires broad action. Slowing climate change should be an industry priority, says Carpenter. “Their livelihoods depend on the climate, so they should be activists in climate improvement.”

He recommends removing U.S. and Canadian biofuel subsidies. “It’s driven a huge increase in corn acreage, which is the most harmful crop for water quality,” he says. “Corn is not good at intercepting runoff, and the land sits vacant for nine months of the year. There’s a short line between the subsidy and harm to water resources.”

Agriculture can also stem fertilizer runoff to help reduce algal bloom. “Increase the amount of cover by year-round vegetation so we don’t have a lot of bare soil,” he suggests. “Use less phosphorus fertilizer.”

Saad Jasim, an environmental consultant and former director with the International Joint Commission (IJC), agrees. “If you used to put fertilizer down in September, but now the heavy rains come in September, wait another month because you don’t want to waste money,” he says.

Improving infrastructure can also help reduce severe storm damage and prevent sewage from getting into the lakes. “Our wastewater infrastructure isn’t designed for the 100-year storm, which is now happening a few times a year,” says Krantzberg. She says to adapt, municipalities should upsize pipes when it’s time for repairs. Cities can also redevelop brownfields and leave greenfields to absorb rainwater.

To compensate for impervious city surfaces, Krantzberg says local businesses can “use porous pavement, [construct] green roofs and put bioswales [grassy gutters that let water percolate down] on the sides of parking lots.”

Industry players should also track and manage their water impact. The Council of Great Lakes Industries is creating a region-specific water footprinting tool based on the Alliance for Water Stewardship model and set to launch in 2014.

To prevent new invaders, ships must follow water intake and discharge regulations. Ships are required to: take on water when floating high to avoid sucking bottom-feeders, minimize the amount of water drawn, treat water prior to discharge, and only discharge in designated areas.

To combat low lake levels, many industries have advocated dredging. But it can displace marine life and disrupt water flows. “From an environmental perspective, dredging is a pretty horrible activity,” says Muter.

Instead, she applauds the IJC’s April 2013 recommendation to install flow-reduction sills in the St. Clair River, saying the structures would both increase lake levels and protect fish habitats over the long term. The IJC proposed raising levels by 10 inches; Muter would prefer 20 inches. She adds there’s an outstanding agreement between the U.S. and Canada for 16 inches.

Sills, which are like speed bumps, would hold water back on Lake Huron. Muter estimates it would cost about $200 million. “It will take three years for the U.S. Army Corps of Engineers to come up with the analysis,” she says, and another year for governments to agree to and fund the project. “Within 10 years the water levels in Michigan, Huron and Georgian Bay can be restored.”

While some stakeholders may not be able to wait, Muter says that’s the “harsh reality when dealing with bi-national waters.” Plus, dredging can literally only go so far. If you install sills responsibly, she says, “you protect all Great Lakes and deal with 100 years of human alterations in the St. Clair.”

The post Great lakes, big problem appeared first on Corporate Knights.

There’s no need for an alarm clock in Costa Rica. Nature does the job just fine, and the rich biodiversity that fills this Central American country with life is why ecotourism has become one of its largest and fastest-growing industries.

But Costa Ricans got a wake-up call of a different sort on October 13, 2008. That’s when then-president Oscar Arias declared by executive decree that an open-pit gold development proposed by a Canadian mining company – and opposed by a majority of citizens – was “in the national interest.”

Arias also lifted a moratorium that his predecessor, Abel Pacheco, put in place in 2002 to protect, in effect, the country’s booming ecotourism industry. In doing so, Arias set in motion a battle of wills, at times nasty, between citizens trying to remain true to their country’s environmental values and Calgary’s Infinito Gold, a foreign investor determined to profit from what it called “one of Central America’s premier gold projects.”

Several years of street protests – some of the largest in recent years – and court challenges have been met with defamation lawsuits and corporate posturing.

Opponents of open-pit mining have so far come out on top. The moratorium was reinstated, followed by a permanent ban, and Infinito’s concessions were just this year officially annulled. After years of intense dispute, however, both sides appear worse off than when they started. Meanwhile, Infinito refuses to go away – at least not quietly and without significant compensation to cover what it calculates as more than $1 billion in opportunity costs.

“The saga has, to my knowledge, no precedent in this country,” said Nicolas Boeglin, a professor of international and environmental law at the University of Costa Rica. Describing what unfolded as “sadly disappointing,” Boeglin, who is opposed to the Infinito project, said the decision by Arias to lift the ban should never have been made given how important sustainable development has become to the country’s economy.

Others say Infinito shares the blame for not cutting its losses earlier. Its persistence appeared to grow as the price of gold climbed. It took the gamble and, having lost the wager, has threatened to sue the country it courted for 13 years to cover what turned out to be a bad bet.

So how did this mess come to be?

Green vs. gold

Tour guide Mario Guzman stops his van and points to a scorched field where sweat-drenched workers in the open sun use machetes to chop down blackened sugarcane stalks. Fields are set on fire to remove leaves, chase away rats and poisonous snakes, and heat up the stalks to draw out the sugar. It’s hard labour, and few Costa Ricans will do it, said Guzman, explaining that such workers tend to be poor Nicaraguan migrants.

Certainly poverty is still a problem in Costa Rica. Job creation is a high priority, but the country has options. Having established more sustainable paths to creating wealth over the past three decades, Costa Rica today can better afford to be picky – to not pit its economy against its environment.

Costa Rica is by many measures the world’s top ecotourism destination. A growing number of foreigners are lured to its majestic volcanoes, national parks, cloud forests and world-class beaches. Since the mid-1980s, tourist visits to this stable democracy have jumped roughly nine-fold to 2.34 million in 2012. Tourism now represents about 7 per cent of Costa Rica’s GDP, with a vast majority of those dollars coming from job-creating ecotourism activities.

It took effort and long-term vision. A hundred years ago about 85 per cent of Costa Rica was covered by forest, but clearing for agriculture and cattle ranching reduced that cover to just 29 per cent by 1989, according to the World Resources Institute. In 1996, the country changed course. In a pioneering move, it began paying landowners to protect and regrow forests – an approach called “payment for ecosystem services.” The result is that forest cover today has surpassed 50 per cent, better supporting the biodiversity that has become crucial to tourism growth.

Consider, also, that nearly 95 per cent of electricity produced in Costa Rica comes from renewable sources, and a quarter of its land is protected by law. Little wonder the country ranked fifth out of 132 countries on Yale University’s 2012 Environmental Performance Index, putting it in the same league as Norway and Switzerland.

“Costa Rica has been extremely successful with ecotourism,” said Jose Maria Figueres, who was president between 1994 and 1998. While supportive of “responsible” mining during his presidency, he is also widely credited for putting in place the policies that would encourage sustainable economic development in the country. “The whole thrust was to make Costa Rica an example – proof that sustainable development was in fact possible, but also profitable,” Figueres told Corporate Knights.

It is against this dreamy, nature-embracing backdrop that Infinito’s Crucitas goldmine development was destined to emerge as controversial. Located in northern Costa Rica near the heavily forested border with Nicaragua, the proposed open-pit project encroaches on a large area that two endangered species call home – the mountain almond tree and the Great Green Macaw.

Generally speaking, open-pit gold mining is a notoriously dirty practice involving the clearing of forests, routine blasting of solid rock and use of a cyanide solution to separate small amounts of gold dispersed in tonnes of crushed ore. The cyanide chemically bonds with the gold as it seeps through large heaps of ore. The gold is then removed from the solution through a separate chemical process, leaving behind an artificial pond of cyanide that is typically reused. A main worry is that leaks and dust from operations will poison nearby rivers and lakes.

Such gold projects have a relatively small footprint compared to a cattle ranch or plantation, but it’s a heavy, toxic footprint that can leave behind deep scars. “It’s pretty much the most dangerous form of mining environmentally,” said Jamie Kneen at MiningWatch Canada, an advocate for responsible and sustainable mineral development.

That didn’t stop Infinito from promising its project would be, in its words, “environmentally benign.” Like many mining companies entering a new frontier, Infinito said it would do things differently. The company’s local operating subsidiary, Industrias Infinito, assured authorities and the Costa Rican public that pollution would be minimized and Las Crucitas would be fully restored once the gold was removed.

“I think they were honest in trying to do things differently,” said Carlos Manuel Rodriguez, Costa Rica’s former minister of environment and energy. The company committed to building roads and housing, establishing training programs, opening a new school, and creating hundreds of jobs for an impoverished region of the country, winning it some localized support. But Rodriguez wasn’t convinced Infinito knew what it meant to be environmentally sustainable in a sensitive tropical region. For example, the company needed to chop down old-growth forest on hundreds of hectares of property before it even began mining.

“They said, don’t worry, we will plant a lot of trees, and that just showed us how ignorant they were,” he said. “A tree plantation can’t replace an old-growth forest that is home to hundreds of species. These companies, even though they may have the best of intentions, they don’t have the know-how.”

Yet Infinito persisted. It also had a major shareholder willing to be patient. Ron Mannix, the media-shy multibillionaire from Alberta, owned a controlling stake in Infinito through his company Coril Holdings. Known for his local philanthropy, Mannix, 65, got his start in the construction and coal industry before taking over the family business with his brother, Fred. With one of Canada’s richest and most respected businessman behind the venture, Infinito gained instant credibility with the investment community.

Corporate Knights made several attempts to interview Mannix for this article, but e-mail and phone requests went unacknowledged up to the time of publishing. Likewise, requests were made to speak with Infinito chief executive John Morgan and Yokebec Soto, Industrias Infinito’s spokesperson in Costa Rica. Morgan did not reply. After several follow-up requests, Soto supplied a 530-page document in Spanish outlining the history of the Las Crucitas project. Beyond that, “we are not able to talk about any detail of the situation,” said Soto, citing the company’s attempt to resolve the dispute through international tribunal.

That document – along with corporate press releases, securities filings, and local media reports – paint a picture of a company getting mixed political signals. At the same time, it appears Infinito also misread (or ignored) a growing public desire to prevent Las Crucitas from going ahead. Yet Infinito persisted. It tried to work its way through a system clearly in transition, only to get pushback from citizens, the courts and bureaucratic agencies every step of the way.

Open pitfalls

The Crucitas project dates back to 1992, when Vancouver-based gold miner Placer Dome (since merged with Barrick Gold) obtained an exploration permit and began analyzing and mapping the region. Infinito Gold (then named Vannessa Ventures) purchased the project in 2000 and within 18 months had secured an exploitation permit from the Costa Rican government. All it needed was approval of its environmental impact assessment and it could get started on its big dig.

Price of gold: $300 an ounce.

What confidence the company might have had going into 2002, however, was deflated on April 7 when Pacheco was elected as Costa Rica’s new president. His Social Christian Unity Party was serious about sustainable development and, soon after taking charge, the new government announced a moratorium on open-pit mining.

Rodriguez, who served as Pacheco’s environment and energy minister, said open-pit projects brought high social and environmental costs but offered relatively little benefit, especially in a country known for ecotourism. Costa Rica, he said, only collected a tiny 2 per cent royalty on the extracted resource and it lacked the scientific capacity to monitor environmental compliance and verify that a company was meeting contractual obligations. Most often, ministry bureaucrats had to blindly trust and rely on the information the miners provided.

“We had just six scientists covering hundreds of concessions,” Rodriguez said.

If the government were ever to lift its moratorium, he said, the royalty would have to increase 15-fold to 30 per cent, where it stands in many developed countries. This would bring in enough revenues to hire more scientists, build up expertise and strengthen enforcement efforts.

At first Infinito believed its Crucitas project would be grandfathered because it had obtained its exploitation permit weeks prior to the moratorium taking effect. What it didn’t count on was two citizens stepping forward to question the validity of its permit through the courts.

The citizens argued, and the constitutional court agreed, that the concession was granted before approval of an environmental impact assessment. In other words, through no fault of the company, the issuance of Infinito’s permit was not legal. The company appealed the 2004 finding, but the constitutional court upheld its decision in 2006. The price of gold was now above $400 an ounce. Rather than try to recover its costs and walk away, Infinito stayed with it, choosing, according to a company press release, to interpret the constitutional court’s decision as only a “partial annulment” that could be rectified.

Glenn Ives, chair of consulting firm Deloitte Canada and head of its North and South American mining practice, said large, multinational mining companies can more easily afford to walk away from a specific project that is one among dozens. Small firms like Infinito face different pressures. In the case of Infinito, its assets in Costa Rica represented at least a third of its business prospects. “I have a lot of empathy,” said Ives, adding that it’s always a tough call for a small mining company in such situations. Ultimately, he said, “a company has to do what it thinks is appropriate for its shareholders.”

And those shareholders were buoyed by the change of government that came in 2006, when the National Liberation Party’s Arias replaced Pacheco as president. With the arrival of Arias, who had also been president during the late 1980s, came a much more conservative, trade-friendly administration.

Indeed, in 2008 the Arias administration lifted the moratorium on open-pit mining and in a surprise move the president himself issued a decree calling Las Crucitas “in the national interest.” With presidential approval, Infinito wasted little time. Almost immediately, it began clearing trees at the site in preparation for the mine. With the price of gold now about $700 an ounce, the company’s patience appeared to be paying off and it was eager to get started.

“With any luck, we’ll have gold bars by December 2009,” said Infinito’s Morgan in a story published by Canada’s Troy Media on October 30, 2008, just two weeks after the Arias decree. But Morgan spoke too soon. Shortly after he was interviewed for the article, Infinito was served with a court order requiring it to immediately cease its activities on the site. This was the result of yet another citizen challenge that would see the project thrown into four more years of legal limbo as two branches of the Costa Rican court system – constitutional and administrative – waded through the heated case, at one point disagreeing with each other.

The Arias decree had struck a deep public nerve. “You can’t imagine the public opinion outrage that followed,” recalled Rodriguez, who said the drama included hunger strikes by project opponents and a rise in the size and number of protests. “From that day forward it became hell for the government.”

It was also a personal hell for Arias, who received so much pushback from citizens that he reinstated the moratorium in April 2010, a month before leaving office. Later that year, an administrative appeals court annulled Arias’ presidential decree because of what it considered “irregularities.” At the same time, Costa Rica’s public ministry followed the court’s recommendation that it launch criminal investigations into the actions of Arias and several officials from his administration.

One area of focus has been the timing of an alleged $200,000 transaction to Arias’ Peace Foundation just days before the president issued his “national interest” decree. The newspaper La Nacion reported that the donation came from Infinito’s Mannix, but nothing has been proven in court. As part of their investigation, Costa Rican authorities are analyzing information it requested from the Canadian government. There’s no evidence to suggest Mannix or Infinito made an improper payment, and no charges have been laid against Arias.

Canada’s foreign affairs department has been keeping silent on the case. “I’m afraid there’s not too much we can say on the matter,” said department spokeswoman Caitlin Workman. “We can’t comment on state-to-state diplomatic communications.”

By 2010 the whole issue was so politically toxic that all candidates running for president that year vowed to keep the open-pit mining moratorium. In fact, it has since become a permanent fixture of law through a unanimous vote by Costa Rica’s congress.

A “bully” awakens

Infinito grew increasingly frustrated. By September 2011 gold had reached a record $1,924 (U.S.) an ounce, meaning the 1.2 million ounces of gold the company had hoped to start recovering in 2009 would have a market value of $2.3 billion – more than six times what it was 10 years earlier when it first began pursuing Las Crucitas.

The company’s tactics became noticeably more aggressive. Infinito began hitting its critics – academic and political – with lawsuits alleging it was a victim of criminal defamation. Boeglin, among at least a half dozen who were sued, was slapped with a $1 million suit based on critical comments he made in a university-directed documentary about Las Crucitas called Fool’s Gold. Boeglin was acquitted in a decision that was reaffirmed on appeal earlier this year.

Boeglin’s colleague, biology professor Jorge Lobo, was similarly sued and acquitted. But Infinito went further with Lobo, pressuring the university to prevent the professor from teaching a seminar that included a history of the Crucitas controversy. So disturbed by Infinito’s attempt to censor Lobo – and chill the academic community in Costa Rica – the Canadian Association of University Teachers, in a gesture of solidarity, urged Infinito to withdraw its lawsuit and stop meddling with university affairs in the country.

“This interference with academic activities is wholly inappropriate and significantly threatens academic freedom,” the association wrote in a strongly worded letter to Infinito’s Morgan and copied to John Baird, Canada’s minister of foreign affairs. “We are appalled to see such acts of intimidation against academics carried out by a Canadian company and concerned about the message it sends internationally regarding Canadians’ commitment to academic freedom, intellectual inquiry, free expression, and critical debate.”

Lawyers’ Rights Watch Canada also expressed outrage, as did eight other non-governmental organizations in Canada, including the Council of Canadians and Sierra Club Canada. In a jointly written letter to Morgan in April, they also took issue with attempts by Infinito’s lawyers to have a judge removed from Costa Rica’s Constitutional Chamber of the Supreme Court because of his unfavourable view of the company’s case. The company’s behaviour, they argued, was an attempt to “override the will of a small, eco-friendly nation” and would “further sully Canada’s reputation in that country.” Morgan did not reply to their letter, nor did any representative of Infinito, according to the groups.

Heading into 2013, Infinito continued to insist that after playing by the rules it had been caught in a “legal vacuum.” But any uncertainty around the legality of its Crucitas concession was put to rest in June, when the Constitutional Chamber of the Supreme Court unanimously rejected its appeal.

From the company’s perspective, Costa Rica was breaching its bilateral investment treaty with Canada. Its reaction to the court’s decision was to swiftly issue an ultimatum to the country: resolve the dispute in six months or be sued for more than $1 billion ($97 million invested to date plus “lost opportunity”) through the International Centre for Settlement of Investment Disputes, an arbitration tribunal funded by the World Bank and established to protect the rights of foreign investors. It would be the largest lawsuit ever launched against Costa Rica, equivalent to more than 2 per cent of its GDP.

Industrias Infinito’s Soto slammed the country in the local press, calling it a “threat to foreign investment” and one of the worst places in Latin America to invest. (In fact, the World Bank’s “Doing Business 2013” report places Costa Rica in the middle of the pack and calls it one of the world’s 10 most improved countries.) Soto also said the final Supreme Court ruling only “marks the beginning” of the company’s legal efforts. She added that Infinito would not leave the country until it was fully compensated.

Kneen at MiningWatch, who calls Infinito a “bully,” said the company’s persistence is baffling. “They’ve been told so many times to go away through various court rulings, you’d think the message would get through.”

When the dispute is eventually resolved, it is likely Costa Rica will have to pay some sort of penalty. “When you play by the rules, receive permits and invest, only to have a government change its mind – irrespective of why – there’s a cost to that, and that cost is determined in court,” said Ives at Deloitte. Rodriguez didn’t disagree. “The company has a fair right to ask for due compensation,” he conceded, at the same time calling “unfair” the demand for more than $1 billion.

Ives said such cases are becoming more common – in both developing and developed countries – and this is creating major challenges for the mining industry. Both sides can get emotional, and when companies resort to what are seen as aggressive tactics it doesn’t help their cause. “Fundamentally, you cannot build a mine in a place you are not welcome in. You just can’t do it. And if you try, the problems will just get bigger and bigger,” said Ives. “But if we want to live the lifestyle we’re accustomed to, we need mines. So how do we do them in the most environmentally friendly way possible? There are no easy choices.”

However it turns out, former president Figueres expressed pride in his country’s decision to draw a line, even if there will be short-term costs in doing so. “I am certain that a great majority of Costa Ricans would feel not only very happy, but would also feel this was the right thing to do,” he said.

“The country is holding true to its values. Investments such as open-pit mining are not necessarily the type of investing that generates in the medium and long term the best results and returns for Costa Rica.”

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The inner hive is in fact pulsating with tiny yellow-and-black Melipona bees. Humming squadrons quickly take formation to alight on her hand and hair. As nectar is drawn up into her chef’s syringe, then dabbled onto a spoon for strangers to taste, more Meliponas arrive and seem poised to attack the invaders. But instead, the stingerless bees merely tickle as they crawl across human arms and eyebrows, apparently foraging for some new exotic blossom to savour and pollinate. No doubt they are dismayed to taste only salty sweat, since they lose interest and quickly disappear.

By contrast, the amber gold nectar they produce glides across the palate like liquid silk. More fluid than honey made from domestic bees, it transmits a translucent sparkle and has a unique lemony finish and a tart hint of acidity to temper the natural sugar. Only a single drop is needed to trigger a delighted grin.

Nobody knows that better than Richardson Frazao, a Brazilian biologist who has become a leading scientific authority on the wild bees of the Amazon. He is also the field manager of an innovative program to protect the Meliponas and the biodiverse habitat they both depend on and sustain.

Rodrigues’s 70 wild bee boxes, built in a grove of tropical fruit and nut trees some 200 kilometres from the equatorial port of Belem, Brazil, serve as the most successful pilot project among a dozen poor, remote communities in the eastern Amazon. Each hive produces about one litre per year, which Rodrigues bottles and sells as nectar. She also uses the wax-like propolis to make distinctly scented soap, shampoo and cosmetic products.

The annual income this generates for her family is modest by Brazilian standards, and meagre by North American or European standards. But in a region ravaged by high unemployment, such self-generated income is a domestic godsend.

More strategically, Rodrigues’s income from wild nectar husbandry is higher – and more sustainable – than the only alternative: being paid low wages to slash, burn and raze tropical forests for lumber and cattle interests. To date, some 70 million hectares have already fallen in Amazonia, and her small land holding is on the northern front of approaching clear-cuts.

The bulwark against this, Frazao has calculated, will be rural communities that replicate Rodrigues’s example and discover that they can earn higher, more enduring incomes by protecting their forests rather than being temporarily hired to help destroy them.

His daring plan has the backing of the Peabiru Institute (a science-oriented foundation based in Belem), the Netherlands’ Royal Tropical Institute, Conservation International and The Nature Conservancy. All agree that Frazao’s wild bee initiative may be the most effective way to protect remaining Amazon forests, restore biodiversity and promote economic equity among some of Brazil’s poorest peoples.

That is a lot of weight to rest on the delicate wings of an insect barely bigger than a fingernail. But the saving grace is that there are billions of them, in hundreds of species, each of which has been selected through evolution to pollinate distinct trees, flowers and shrubs. That means they are the lynchpin of biodiversity.

In the densest parts of still-intact Amazonia forests, Frazao has recorded up to 79 species of Melipona bees in a single hectare. This confirms a jaw-dropping level of indigenous forest biodiversity there, but it is by no means an isolated example.

Of the 20,000 wild bee species globally, there are some 400 known species of Melipona bees in the Amazon basin, which extends into Peru, Bolivia and Ecuador. About 10 new species are discovered each year. Frazao himself may soon be credited with one if independent tests verify his discovery.

Shy with strangers, but quick to flash a genial smile – especially within tasting distance of Melipona nectar – Frazao hopes to maximize community bee projects by combining science and social engagement.

“I get lots of pleasure from identifying wild bees, and from doing pure science,” the PhD candidate says during a translated interview in his Peabiru Institute office. “But science is only part of the solution. The other part is to show communities the real value of biodiversity, and to empower them to protect it.”

To that end, since 2006, Peabiru and global foundations have helped finance more than 2,000 bee box placements with 350 families in 16 remote communities. There, typical cash incomes average less than $3 per day. The recipients include indigenous tribes, Afro-Brazilian slave descendants called Quilombolas, and the rural poor.

In each setting, Frazao looks for entrepreneurial champions, like Rodrigues, to ignite community interest with bottom-line economics. A typical bee box costs $25 to make with local labour and materials, but yields nectar worth up to $90 each production season. The bee pollination also increases the nearby yields of edible fruits and nuts, which can be harvested for subsistence food or sold for cash.

As with domestic bees, Melipona hives can be split and transplanted to new bee boxes, which in turn can be divided again. So, in the manner of bank bonds paying compound interest, Frazao and Peabiru Institute hope to soon see their original investments (jointly shared by Peabiru and community associations) accelerate in scale and value.

They have plans to enlist Brazil’s network of embassies and globally famous chefs to promote the “Amazon Amber” Melipona nectar; sell the scented soap and cosmetics under special labels; and scale up production by using solar-powered extractors where power grids don’t exist. Long-range goals include a portable, commercial-grade honey processing unit, which also refrigerates the nectar so it does not crystallize or ferment before it can reach outside markets.

However, Frazao cautions, the health of the wild bees and the forests they sustain will remain the highest priority. Their plan includes carefully confining each Melipona species to its endemic location, not mixing species in adjacent bee boxes or districts, and resolving not to torque production beyond the natural limits defined by evolution.

“As more poor communities join in wild nectar production, they will fight to protect and even begin restoring native tropical forests,” predicts Joao Meirelles, a noted Amazon scholar, author and founder of Peabiru. “The numbers are on our side. Every hectare saved can support 50 to 80 Melipona species, and up to 500 bee boxes with a foraging range of 600 hectares.”

Frazao nods, adding: “My dream is that these Amazon communities can position themselves in a market where they are paid proper value for their work and unique, high-quality product, while at the same time protecting their forest and biodiversity.”

And does the scientist who works with bees all day dream of otherworldly Melipona nectar at night? A surprised, faintly guilty grin telegraphs his answer.

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In Canada, for example, 82 per cent of the population now lives in cities. The percentage of urban dwellers is slightly higher in the United States at 84 per cent, while Mexico sits at 78 per cent. According to the United Nations Department of Economic and Social Affairs, which tracks global urbanization trends, Canada and the U.S. now rank among the Top 50 urbanized countries – ahead of Germany, England, Italy and other Western European states.

Some cities may be experiencing booming growth, but public investment in urban infrastructure such as sewage and solid waste management, energy production and distribution, transit, and other built structures has lagged. As noted in a recent Canadian Centre for Policy Alternatives study, this growing urban infrastructure deficit is impossible to ignore:

“The evidence is clear, both in the statistics, and in the everyday experience of Canadians in every part of the country: in spine-jarring streets and highways; in mind-numbing and catastrophically wasteful traffic jams … in the struggles of rapidly growing communities to keep up with the need for the basic nuts and bolts of urban civilization.”

The study and other research show governments have responded to the infrastructure deficit during times of crisis, spending billions with economic stimulus programs to keep the construction industry going during economic downturns or when alarming episodes of crumbling expressways and sewage floods make headlines.

At the same time, a less obvious but incredibly valuable asset of cities – green infrastructure like urban forests, local parks, healthy waterways and beaches – has received comparatively little political attention or government funding, despite its enormous value to urban dwellers.

Natural ecosystems and vegetative technologies like green roofs and engineered wetlands extend the life of many types of traditional infrastructure by assisting, for example, with storm water management. They also provide a range of additional co-benefits that improve the health and well-being of urban communities. This includes reduced smog, enhanced habitat for biodiversity like songbirds and insect pollinators, increased workplace productivity, and even psychological and restorative benefits for urban dwellers, such as stress relief.

Yet, while leafy neighbourhoods still exist in older parts of major cities, such as Toronto and Chicago, most remain largely deforested. Experts have determined that a minimum 30 per cent forest cover is required to maintain a healthy local ecosystem, yet only 18 per cent of Toronto and an abysmal 5 per cent of some of its bedroom communities are covered in trees. Indeed, despite their critical value as natural assets, forests and other elements of green infrastructure continue to be dug up, drained and paved over to make way for more roads, strip malls and subdivisions.

The consequences of this decline and degradation are far reaching. They include higher built infrastructure costs associated with managing storm water and greater vulnerability to natural disturbances such as floods and storms, as Hurricane Sandy demonstrated. Furthermore, new research also shows that people living in neighbourhoods lacking in mature trees and other green infrastructure face increased depression and other health risks.

A recent U.S. Forest Service study found that widespread infestation of urban forests and tree-lined streets by the emerald ash borer, an invasive insect, has not only killed tens of millions of urban trees, but is contributing to higher rates of death from cardiovascular and lower respiratory tract illness among urban dwellers. These are the first and third most common causes of death in the U.S.

The direct causal relationship between trees and human health is not fully understood, but scientists believe people living in urban areas are less active, suffer from greater stress levels and are exposed to poorer air quality in neighbourhoods lacking green infrastructure. Conversely, trees are so efficient at removing airborne pollutants like carbon monoxide, lead and nitrogen dioxide that Columbia University researchers estimate for every 343 trees added to a square kilometre, asthma rates in young people drop by about 25 per cent.

And let’s not forget greenhouse gases. Another recent study by the U.S. Forest Service found that America’s urban forests store an estimated 708 million tons of carbon, an environmental service with an estimated value of $50 billion. Annually, net carbon uptake is estimated at 21 million tons, representing $1.5 billion in annual economic benefits.

While higher levels of government have yet to catch on to the enormous value of sustaining and growing the stock of green infrastructure in our cities, leadership is happening at local levels. For example, the David Suzuki Foundation and more than a dozen local community groups have launched a cheeky new campaign to create Canada’s first “Homegrown National Park” in downtown Toronto. This new crowdsourced green urban corridor will be located along one of the city’s most notable “lost rivers,” which now lies buried beneath asphalt and concrete. The project aims to enhance, restore and create urban green space and other green infrastructure through planting native trees and shrubs, cultivating bird- and bug-friendly gardens, and growing food in backyards and on balconies.

Continuing to ignore the green infrastructure needs of our cities, such as local parks and naturalized school grounds, is shortsighted. Green spaces complement traditional infrastructure, provide a multitude of ecological benefits and contribute to the health and well-being of urban populations.

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