It has been along journey for a brilliant Indian-British economics professor called Partha Dasgupta who at last is telling us that the GDP figures we are watching every day have never taken our environment into consideration.
He was asked by the British government to write a paper which he has now published called “The Economics of Biodiversity: The Dasgupta Review”, and what a paper… 600 pages of facts and proposals…
The report is a long and carefully written document that many are already saying it is of equal importance to Nicholas Stern’s report on Climate Change in 2006.
Up until now, our global economies are built on buying and selling, but often, no one pays for the most basic goods and services like water, the soil to grow food, the clean air that we breathe to breathe, the rain forests that maintain enormous biodiversity and absorb one-third of the carbon dioxide we produce.
Do you realise that our governments are letting companies destroy natural habits like fish ecosystems and rain forests so companies can maximise their profits? They are even paying away our money to these same companies to destroy these natural habitats. The companies are not being forced to compensate for what they destroy, they are being paid to do it!
The report reminds us: “We rely on Nature to provide us with food, water and shelter; regulate our climate and disease; maintain nutrient cycles and oxygen production; and provide us with spiritual fulfilment and opportunities for recreation and recuperation, which can enhance our health and well-being. We also use the planet as a sink for our waste products, such as carbon dioxide, plastics and other forms of waste, including pollution.
Nature is therefore an asset…
… just as produced capital (roads, buildings and factories) and human capital (health, knowledge and skills) are assets. Like education and health, however, Nature is more than an economic good: many value its very existence and recognise its intrinsic worth too.
Biodiversity enables Nature to be productive, resilient and adaptable. Just as diversity within a portfolio of financial assets reduces risk and uncertainty, so diversity within a portfolio of natural assets increases Nature’s resilience to shocks, reducing the risks to Nature’s services. Reduce biodiversity, and Nature and humanity suffer….”
The word “asset” is crucial here because this puts Earth’s Nature right in the middle of financial investments. One of the most fundamental rule of investing is that a portfolio of assets is diversified. In Nature the global population needs to have biodiversity being sustained and not being destroyed at an ever increasing rate. Our natural resources are being depleted by more that can be maintained by mother Nature. Recent estimates suggest that we would need 1.6 Earths to maintain the world’s current living standards…
“Biodiversity is declining faster than at any time in human history. Current extinction rates, for example, are around 100 to 1,000 times higher than the baseline rate, and they are increasing. Such declines are undermining Nature’s productivity, resilience and adaptability, and are in turn fuelling extreme risk and uncertainty for our economies and well-being.”
We need to change how we think, act and measure success – but that is to be revealed in the coming articles on this excellent Report which can be read at this link.