The Indian-British economic’s professor, Mr. Partha Dasgupta, was in Helsinki this week to meet the heads of government where your Editor in Chief at FinnishNews interviewed him.
He is rather a lonely figure at 89 years old of Indian descent but now lives in Cambridge where his garden is a “mass of overgrown weeds, with just a tiny lawn where he and his wife can sit on deckchairs in the sun – “Lawns are not a sustainable biodiverse solution, quite the opposite!” he mused.
But his rather humble appearance does not belie his political influence, nor does he spend much time sitting in the sun. He told me that he is continuously being whisked around the world to meet important political leaders and wealthy benefactors, like President Biden, Modi, Hank Paulson, Tony Blair, Mark Carney, etc… the list of names was rather long, and now the Finnish leadership was added to the list.
You may recall that 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 which can be read at this link.
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.
Mr. Dasgupta says that up until now our global economies are built on buying and selling, but we seldom pay 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.
He made to point that oceans, natural lakes, wetlands, the air, tropical forests, mangrove swamps are all public goods that are undervalued by society and especially by economists. Ecologists, a new breed of scientists who are now gaining much more political influence, are now able to put the correct price on these public goods.
He was serious when he said that economists are paid too much and ecologists too little, stating that this is the result of banks employing too many economists and too few ecologists!
He pointed out that shipping companies use the oceans without paying a penny!
Big countries are polluting the oceans without paying for the damage they cause…
… so his proposal is for global leaders to be innovative again like they were after the Second World War when they established the United Nations, the World Bank, and many other global institutions. Now Mr. Dasgupta is proposing that we establish a United Climate Fund for collecting rents and revenues from greenhouse gas-emitting countries that are then paid to the countries that harbour and maintain the rain forests, mangrove swamps and wetlands. Other payments are also paid to new global air and water ocean pollution removal and cleaning operations.
We in the West and in many other big countries elsewhere are enjoying the benefits of clean air being produced by the globes tropical forests.
He stated that our governments are letting companies destroy natural habits like fish ecosystems and rain forests so companies can maximise their profits? Wanting to make profits is nothing wrong in itself but if this activity leads to total destruction of our planet, then…!
He repeated twice that governments and public sector entities are actually paying some €5 trillion in subsidies 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 – this is covered in this brilliant report, which can be read at this link.
One of his final comments was perhaps the most interesting. He mentioned that small poor communities are often the best asset managers of the natural resources they use and cultivate. They never overfish but only take out what mother nature can replenish with ease.
He summarises his report simply by saying, “The present population of this globe has trashed Mother Nature.”