Putting biodiversity on the balance sheet
What’s the economic impact of draining a wetland, or depleting soil health? An economist is looking at the value of some of the mostly unseen ecological services nature performs.
A lot of what occupies economist Professor Sir Partha Dasgupta’s mind is invisible processes.
While environmentalists fighting for wetland protection, or against native habitat loss, might not think an economist who spends his time contemplating invisible processes is a useful ally, they would be wrong.
Dasgupta is leading an independent global review commissioned by the United Kingdom Treasury. Titled ‘Economics of Biodiversity’ it will look at how biodiversity supports economic growth and how its loss impacts economic growth.
The review has been asked to provide a range of scenarios for enhancing global biodiversity compared with business as usual. It will assess a range of best practices, initiatives and interventions for industry, communities, individuals and governments which achieve the goals of enhancing biodiversity and deliver sustainable economic growth.
It will be presented in October at the 15th United Nations Convention on Biological Diversity. The ambassador of the review, Sir David Attenborough, will promote it around the world.
Dasgupta visited New Zealand as part of the Professorial Fellowship in Monetary and Financial Economics which included a free public lecture and a week each at Victoria University of Wellington and the Reserve Bank of New Zealand.
He spoke to Newsroom about the work the review, and how invisible processes that have been neglected have a value.
The essential, mostly unseen processes
It's not just a number of species that Dasgupta sees as biodiversity, it’s the functions biodiversity provides to the planet.
Soil regeneration, the nitrogen cycle, water filtering, and storm buffering are some of the mostly invisible services occupying Dasgupta’s mind.
He splits what the biosphere - the world we live in - gives us into two categories he feels there is a tension between.
“Category A consists of services we get which we convert to food, water, timber, fibre and so forth. It’s that category which gets pressed really hard because we want to feed ourselves, we want to have bricks and mortar, we need timber for building, fibres for clothing.”
These services generally have markets, are often in private ownership and are fiercely protected with those with a stake in them.
Category B services such as soil regeneration, water filtering, carbon recycling are at “loggerheads” with investment in category A services. Often there’s no market for these services. They’re part of the commons. Protection for these, if it exists, generally doesn’t have deep pockets.
“The more we invest in category A, we might be demeaning category B, that consists of the hidden services and processes which enable us to survive.”
He gave an example of mangroves, which are used as a source of wood in some countries. They’re also a spawning ground for fish and protection against storm surges. Cut them down for the category A use of timber, and you destroy the category B functions. Baby fish no longer have a safe place to avoid predators and storm surges wash inland bringing devastating salt water to crops and plants.
“These hidden services have been neglected. We’ve taken them for granted and we haven’t really worked to protect them.”
That’s where he hopes his review will come in.
“The aim is to chart out a vision of economic life, which includes these neglected services without which we would be dead.”
Forget plan B, think category B
Dasgupta believes survival will require more than scientific solutions to prolong the extraction of category A products. Protecting the category B services is imperative to survival.
“The starting point of the review is that we are overshooting. We are slowly but surely destroying the biosphere and we have to correct for that.”
Part of his review will cover looking at institutional mechanisms and policies to avert destruction of category B services.
Institutionally he said the focus will be on empowering local community input. Policy-wise he singled out some subsidies as “perverse”.
“We’re looking at trillions of dollars of annual subsidies to the category A type goods - energy subsidies, fishing subsidies, agricultural subsidies - all of those are category A ... These public policies are exacerbating a natural tendency to overuse.”
He knows removing subsidies is likely to cause an uproar and those with vested interests will be likely to lobby against change. The political grit required to withstand this lobbying is essential if there’s a hope for what he calls endangered category B services.
“It’s an insane system that has been created over the years. Largely because people forgot category B services. People thought they could take as much as we could out of the land, or from the fisheries. Look where we are now - dead zones. Agriculture is doing fine because you are pumping more and more pesticides and more agricultural fertilisers but that’s playing havoc with the biodiversity in the soils, the waters, in the forests.”
As well as suggesting subsidies should be challenged, he said he’s not planning to tiptoe around the topic of population growth and standard of living.
All of these play into the pressure on category B services and when habitats hit a tipping point the outcomes can be bloody. He gives the example of the Sudan.
“There you can see the serious biodiversity loss, natural services losses, losses in services people can get. That leads to violence and migration. It manifests itself into religious warfare, or ethnic cleansing. An underlying trigger mechanism is the scarcity of productive land.”
Ideally, he thinks there needs to be a mindset shift from humans seeing nature as a resource to extract from, to something they’re embedded in nature.
Changing a lifelong mindset to place a value on the invisible services he wants people to value won’t be easy. His review will end with a plea for educational reform. He wants the study of nature to be introduced from the first year of schooling.
He hopes this will help people feel like they’re part of nature, rather than being a conqueror. He said while this might sound a little religious, it’s not. It’s more of a feeling you belong to nature.
“It’s like not defiling your own home.”
Help us create a sustainable future for independent local journalism
As New Zealand moves from crisis to recovery mode the need to support local industry has been brought into sharp relief.
As our journalists work to ask the hard questions about our recovery, we also look to you, our readers for support. Reader donations are critical to what we do. If you can help us, please click the button to ensure we can continue to provide quality independent journalism you can trust.