Economics’ failure to tackle nature loss causing ‘extreme risks’, find landmark review

A failure in economics to value the natural world is causing “extreme risks” and demands a “fundamental” rethink, including a better measure than GDP for financial success and new supranational institutions to protect global assets such as rainforests and oceans, says a new landmark UK government review. The 600-page independent Economics of Biodiversity review was led by Cambridge University professor Sir Partha Dasgupta for the UK Treasury. It finds that humanity has collectively mismanaged its global portfolio of assets, meaning the demands on nature far exceed its capacity to supply the goods and services the world relies on. The review says nature is a “blind spot” in economics that the world “ignores at its peril”. It warns that fundamental change in how we think about and approach economics is needed to reverse biodiversity loss and protect and enhance prosperity. The review makes clear that “urgent and transformative” action taken now would be significantly less costly than delay, and will require change on three broad fronts. Firstly, it says humanity must ensure its demands on nature do not exceed sustainable supply and must increase the global supply of natural assets relative to their current level. For example, by expanding and improving management of protected areas, increasing investment in nature-based solutions and by deploying policies that discourage damaging forms of consumption and production. Secondly, the review calls for different metrics than GDP for economic success, which factor in depletion of national resources. It says we should “move towards an inclusive measure of wealth that accounts for the benefits from investing in natural assets and helps to make clear the trade-offs between investments in different assets”. “Introducing natural capital into national accounting systems is a critical step,” it adds. The review also calls for new supranational institutions to protect global public goods. It adds that poorer countries should be paid to protect ecosystems. “We must transform our institutions and systems – particularly finance and education – to enable these changes and sustain them for future generations. For example, by increasing public and private financial flows that enhance our natural assets and decrease those that degrade them; and by empowering citizens to make informed choices and demand change, including by firmly establishing the natural world in education policy,” states the review. The UK government said it will formally respond to the review’s findings in due course. But UK Prime Minister Boris Johnson welcomed the final report. He said protecting and enhancing nature needs “more than good intentions” and requires “concerted, coordinated action”. The review says two UN conferences this year on biodiversity and climate change provide opportunities for the world to rethink its approach to nature, which has seen a 40% plunge in the stocks of natural capital per head between 1992 and 2014. Mr Johnson said the UK will “make sure the natural world stays right at the top of the global agenda” when it hosts the G7 COP26 meeting later this year. On publishing the review, professor Dasgupta said: “Truly sustainable economic growth and development means recognising that our long-term prosperity relies on rebalancing our demand of nature’s goods and services with its capacity to supply them. It also means accounting fully for the impact of our interactions with nature across all levels of society. Covid-19 has shown us what can happen when we don’t do this.” “Nature is our home. Good economics demands we manage it better,” he added. In his foreword to the report, Sir David Attenborough states that the “comprehensive” review is “immensely” important. “The survival of the natural world depends on maintaining its complexity, its biodiversity. Putting things right requires a universal understanding of how these complex systems work. That applies to economics too,” he writes. He says the report shows that by bringing economics and ecology face to face, “we can help to save the natural world and in doing so save ourselves”. “The review argues that nature is our most precious asset and that significant declines in biodiversity are undermining the productivity, resilience and adaptability of nature. This in turn has put our economies, livelihoods and wellbeing at risk,” he adds.

Economics’ failure to tackle nature loss causing ‘extreme risks’, find landmark review

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