A fundamental change in how we think about and approach economics is needed if we are to reverse biodiversity loss and protect and enhance our prosperity, according to an influential report published on Tuesday.
The global review on the Economics of Biodiversity by Professor Partha Dasgupta presents the first comprehensive economic framework of its kind for biodiversity. It calls for an urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world.
UK prime minister Boris Johnson reacted to the report saying 2021 will be a “critical” year in determining “whether we can stop and reverse the concerning trend of fast-declining biodiversity.”
He said the review, commissioned by the Treasury, “makes clear that protecting and enhancing nature needs more than good intentions – it requires concerted, co-ordinated action.
“As co-host of COP26 and president of this year’s G7, we are going to make sure the natural world stays right at the top of the global agenda. And we will be leading by example here at home as we build back greener from the pandemic through my 10 point plan.”
Echoing much of what world leaders said at the recent World Economic Forum, 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 well-being at risk.
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 continued.
The research found that humanity has collectively mis-managed its global portfolio of assets, meaning the demands on nature far exceed its capacity to supply the goods and services we all rely on.
Andrew Bailey, Bank of England governor, said: “Since 2015 the Bank has been focussed on the financial risks generated by climate change and the Dasgupta Review is clear that protecting and enhancing biodiversity will help us address climate change.
Bailey noted that the Bank is working with other central banks on these issues. He said: “It is clear to me that the solutions to the climate-related challenges we face must also benefit nature.”
Kristalina Georgieva, managing director, International Monetary Fund (IMF), said: “Professor Dasgupta makes a most compelling case for economists and policymakers to place our biosphere and biodiversity on an equal footing with human and physical capital.
“The review is a must-read for all global citizens interested in supporting efforts to tackle climate change and safeguard our world for future generations.”
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A call for action
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:
Humanity must ensure its demands on nature do not exceed its sustainable supply and must increase the global supply of natural assets relative to their current level. For example, expanding and improving management of protected areas; increasing investment in nature-based Solutions; and deploying policies that discourage damaging forms of consumption and production.
We should adopt different metrics for economic success and 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.
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 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.
Natural historian and broadcaster Sir David Attenborough said: "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.
“This comprehensive and immensely important report shows us how by bringing economics and ecology face to face, we can help to save the natural world and in doing so save ourselves."
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