Poor rural households often have a very direct connection to nature through subsistence livelihoods. Harvests from forests, fisheries and fields are a primary source of rural income, and a fallback when other sources of employment falter. But programs to reduce poverty often fail to account for the important link between environment and rural livelihoods. As a consequence, the full potential of ecosystems to serve as wealth-creating assets – not just survival mechanisms – has yet to effectively tapped.

The environment matters greatly to people living in poverty. They are often the group most affected by unclean water, indoor air pollution, and exposure to toxic chemicals. They are also particularly vulnerable to environmental hazards such as floods, prolonged drought, and attacks by crop pests, as well as environment-related conflict. These poverty-environment linkages are therefore critical in any poverty-eradication effort.

The environment – land, water and air, as well as the physical and biological elements within them – plays three vital roles in development. First, it provides material and energy inputs. Second, it absorbs or assimilates the waste byproducts resulting from the development process. Third, it provides useful services supportive of human welfare, such as recreational, scientific and aesthetic functions.

Exploitation of the natural environment for development, particularly since the industrial revolution, has resulted in three types of problems. The first, depletion of non-renewable resources such as fossil fuels, has been an important issue in conventional environmental economics for quite some time. The second, which is now increasingly recognized, is deterioration in the physical quality of the environment. Examples include deforestation (and the consequent global warming effects); soil degradation and impoverishment; and air and water pollution. The third type, impoverishment of human welfare, is an outcome of the previous two. It takes a variety of forms, including poor health caused by pollution and food deficiencies.

Many opportunities to reduce poverty by improving the environment exist, but there are significant and often deeply entrenched policy and institutional barriers to their widespread adoption. The decades of experience since the 1992 Earth Summit in Rio reveal some important lessons that help point the way forward.

First, poor people must be seen as part of the solution rather than part of the problem. Efforts to improve environmental management in ways that contribute to sustainable growth and poverty reduction should reflect the priorities of the poor. Supportive policies and institutions are needed, including access to information and decision-making, that expands the poor’s opportunities to invest in environmental improvements that can enhance their livelihoods. At the same time, it is essential to address the activities of the non-poor, since they are the source of most environmental damage.

Second, it is critical to recognize that the environmental quality of growth matters to the poor. It cannot be assumed that environmental improvement can be deferred until growth has alleviated income poverty and rising incomes make more resources available for environmental protection. This strategy ignores the importance of environmental goods and services to people’s livelihoods and well-being. Furthermore, there are many examples demonstrating that bad environmental management is bad for growth, and illustrating that the poor suffer most from environmental degradation. Ignoring the environmental soundness of growth, even in the service of short-run economic gains, can easily undermine growth.

Third, development strategies must encompass environmental management plans. Such plans must be integrated into poverty reduction and sustainable development efforts in order to achieve significant and lasting results. Improving environmental management in ways that benefit the poor requires widespread political, social and cultural change.