The annual cost of global damage to the natural environment has been put at $4,500 billion. This is greater than the annual cost of coping with the financial crisis, according to a European Commission-backed study group.
The Economics of Ecosystems and Biodiversity (TEEB) puts a value on forests, wetlands, grasslands and ocean habitats, and then costs the damage to, or loss of, this ‘natural capital’. They launched their findings at the 10th meeting of signatories (COP10) to the UN Convention on Biological Diversity held in Nagoya, Japan this week.
Pavan Sukhdev, a former banker who leads the programme, said his team measures ‘the multi-trillion dollar importance to the global economy of the natural world’, including forests, which it calls ‘the GDP of the poor’, coral reefs, ocean habitats, wetlands, rivers and even the value of pollinating insects.
He called for ‘a new era in which the value of nature’s services is made visible and becomes an explicit part of policy and business decision-making.’ The report suggests that in future, national measures of GDP and company accounts, should include these costs, which would ‘reset the economic compass’.
‘The time for ignoring biodiversity and persisting with conventional thinking regarding wealth creation and development is over. We must get on to the path towards a green economy,’ Sukhdev stated.
Unfortunately, governments and corporations are heading in the opposite direction. In Britain, Osborne’s Comprehensive Spending Review, launched on the same day as the TEEB report, specifically attacked measures to support bio-diversity. The Con-Lib Coalition has removed up to £1bn a year by 2014-15 from the development of green energy and other initiatives, by putting income from the Carbon Tax into reducing the deficit instead.
Environmental Stewardship schemes that pay farmers to support bio-diversity have been cut. The 20% budget cut for Department for Environment, Food and Rural Affairs (Defra) will lead to funding cuts and possible privatisation for England’s 224 National Parks and for the botanical gardens at Kew.
Globally, the economic crisis is driving reckless and uncontrolled destruction of habitats. Oil drilling in deep water causes constant leakage; tar sand extraction wrecks forests and rivers; the extraction of uranium for the new generation of nuclear power stations is poisoning land, animals and people. Far from ‘internalising’ these ‘externalities’, the corporations do everything they can to avoid taking responsibility, and paying.
However, the work of TEEB is extremely important in looking to the future, beyond capitalism. This kind of economic management will support new concepts of growth that include the costs of extraction and of recycling products at the end of their (very much extended) useful life. Such concepts of course will exclude the capitalist premise that shareholder profit is the sole measure of success.