Transform economics to halt destruction of the natural world, UK study urges

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FILE PHOTO: General view of plastic trash littering the polluted Potpecko Lake near a dam’s hydroelectric plant near the town of Priboj, Serbia, January 29, 2021. REUTERS/Marko Djurica/File Photo

February 2, 2021

By Matthew Green

LONDON (Reuters) – Nations will have to rethink economic growth as a measure of success if they want to make good on pledges to halt the destruction of the natural world, according to a British government-backed report published on Tuesday.

With countries due to meet in China this year to agree on a new global biodiversity accord, studies have sought to underscore the financial benefits of preserving forests, oceans and other species-rich habitats.

The authors of the latest review, commissioned by Britain’s finance ministry in March, 2019, hope its official status will lend extra weight to their calls to place ecosystems at the centre of economic decision-making.

“Nature is our home,” said Partha Dasgupta, an economist at the University of Cambridge who led the study. “Good economics demands we manage it better.”

British Prime Minister Boris Johnson, whose government hosts a climate change summit in November, welcomed the findings.

“This year is critical in determining whether we can stop and reverse the concerning trend of fast-declining biodiversity,” Johnson said.

In a wide-ranging critique of conventional economics, the 602-page report urges policy-makers to accept that all business activity is “embedded” within nature, and to begin to value ecosystems accordingly.

The report’s recommendations reflect a wider debate over whether gross domestic product is an appropriate measure of success, or whether alternative measures could be used to reflect environmental degradation.

“GDP does not account for the depreciation of assets, including the natural environment,” the report says. “As our primary measure of economic success, it therefore encourages us to pursue unsustainable economic growth and development.”

Instead, the authors propose a concept of “inclusive wealth” that would reflect the health of a country’s assets – including its natural assets.

They also call for new ways of assessing the value of the many benefits that nature provides, from clean air and fertile soils to pollination, which would enable policy-makers to better assess trade-offs.

“We know in our hearts that we’re misusing the Earth’s resources,” said Roger Gifford, chair of the London-based Green Finance Institute. “The Dasgupta report is really key for helping us to begin the measurement process.”

Researchers welcomed the findings, saying it could help make the often “intangible” benefits of preserving nature clearer.

“The Dasgupta Review will be key in lifting the importance of biodiversity … in making this intangible into something tangible,” said Nicola Beaumont, an expert in ecosystem services at Plymouth Marine Laboratory.

(Reporting by Matthew Green, editing by Katy Daigle and Nick Macfie)

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