Nature loss 'dwarfs bank crisis'

Macha

Article from the BBC:

The global economy is losing more money from the disappearance of forests than through the current banking crisis, according to an EU-commissioned study. It puts the annual cost of forest loss at between $2 trillion and $5 trillion. The figure comes from adding the value of the various services that forests perform, such as providing clean water and absorbing carbon dioxide.

The study, headed by a Deutsche Bank economist, parallels the Stern Review into the economics of climate change. It has been discussed during many sessions here at the World Conservation Congress.

Some conservationists see it as a new way of persuading policymakers to fund nature protection rather than allowing the decline in ecosystems and species, highlighted in the release on Monday of the Red List of Threatened Species, to continue.

Capital losses
Speaking to BBC News on the fringes of the congress, study leader Pavan Sukhdev emphasised that the cost of natural decline dwarfs losses on the financial markets. "It's not only greater but it's also continuous, it's been happening every year, year after year," he told BBC News.

Global Canopy Programme
"So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today's rate we are losing natural capital at least between $2-$5 trillion every year."
The review that Mr Sukhdev leads, The Economics of Ecosystems and Biodiversity (Teeb), was initiated by Germany under its recent EU presidency, with the European Commission providing funding.
The first phase concluded in May when the team released its finding that forest decline could be costing about 7% of global GDP. The second phase will expand the scope to other natural systems.

Stern message
Key to understanding his conclusions is that as forests decline, nature stops providing services which it used to provide essentially for free.
So the human economy either has to provide them instead, perhaps through building reservoirs, building facilities to sequester carbon dioxide, or farming foods that were once naturally available.

Or we have to do without them; either way, there is a financial cost.
The Teeb calculations show that the cost falls disproportionately on the poor, because a greater part of their livelihood depends directly on the forest, especially in tropical regions. The greatest cost to western nations would initially come through losing a natural absorber of the most important greenhouse gas.

Just as the Stern Review brought the economics of climate change into the political arena and helped politicians see the consequences of their policy choices, many in the conservation community believe the Teeb review will lay open the economic consequences of halting or not halting the slide in biodiversity.

"The numbers in the Stern Review enabled politicians to wake up to reality," said Andrew Mitchell, director of the Global Canopy Programme, an organisation concerned with directing financial resources into forest preservation. "Teeb will do the same for the value of nature, and show the risks we run by not valuing it adequately."

A number of nations, businesses and global organisations are beginning to direct funds into forest conservation, and there are signs of a trade in natural ecosystems developing, analogous to the carbon trade, although it is clearly very early days.

Some have ethical concerns over the valuing of nature purely in terms of the services it provides humanity; but the counter-argument is that decades of trying to halt biodiversity decline by arguing for the intrinsic worth of nature have not worked, so something different must be tried.

Whether Mr Sukhdev's arguments will find political traction in an era of financial constraint is an open question, even though many of the governments that would presumably be called on to fund forest protection are the ones directly or indirectly paying for the review. But, he said, governments and businesses are getting the point. "Times have changed. Almost three years ago, even two years ago, their eyes would glaze over.
"Today, when I say this, they listen. In fact I get questions asked - so how do you calculate this, how can we monetize it, what can we do about it, why don't you speak with so and so politician or such and such business."
The aim is to complete the Teeb review by the middle of 2010, the date by which governments are committed under the Convention of Biological Diversity to have begun slowing the rate of biodiversity loss.

http://news.bbc.co.uk/2/hi/science/nature/7662565.stm

As the report points out, it's a shame that a big € sign has to be put in front of nature to get more people to value it. I have heard the argument that protecting the environment is an entirely selfish human act because we depend on it completely.

Húrin

taconnol wrote: »

As the report points out, it's a shame that a big € sign has to be put in front of nature to get more people to value it. I have heard the argument that protecting the environment is an entirely selfish human act because we depend on it completely.

Thanks for highlighting this. It's really important and fascinating.

I too feel it is a shame that ecology needs a price tag for its protection to be justified. However, it is better that we temper our indignation with the following realisations:

1. Only those of us of a certain psychological disposition are swayed by powerful moral arguments. Others are more swayed by self-interest, others by sticking to the pack. All have useful roles in the human social fabric.

2. Education is a big thing. We are more informed than most people who don't even know that there's an ecological holocaust under way.

3. As a comfortable western middle-class citizen I have to also question how much I am influenced by my lucky circumstance that I don't have to struggle to afford basic necessities, and that I have the time to think, educate myself and be activist on issues like this. Not everyone does.

Blazer

But how much was made from cutting down these forests?
Did it offset the potential future costs?
These are the questions that will be asked.

Macha

Húrin wrote: »

1. Only those of us of a certain psychological disposition are swayed by powerful moral arguments. Others are more swayed by self-interest, others by sticking to the pack. All have useful roles in the human social fabric.

True. Eg, during my reading, I've discovered that the majority of people buy organic for reasons of health or having "safe/clean food" (as they put it). not any worry about ecosystems.

Húrin wrote: »

2. Education is a big thing. We are more informed than most people who don't even know that there's an ecological holocaust under way.

My other issue with this is that climate change seems to be the only thing people are really learning about, through the media. I think people have come to equate climate change with all other environmental issues and the result is some people think recycling helps climate change..which it does in an indirect way, but really the main issue is waste. It's also unfortunate because climate change is the most controversial environmental issue but, for example, it isn't so hard to argue with the EPA reports on water quality

Húrin wrote: »

3. As a comfortable western middle-class citizen I have to also question how much I am influenced by my lucky circumstance that I don't have to struggle to afford basic necessities, and that I have the time to think, educate myself and be activist on issues like this. Not everyone does.

Hmm well, yes we are in the fortunate position that we can choose whether or not we want to damage the environment. Yet on the whole, the rich are the ones are doing most of the damage.

People in less developed countries:
a) don't have time/resources to educate themselves (as you point out)
b) often have no choice economically but take part in environmentally damaging activities (eg the guys cutting down Amazon on Bruce Parry's show..)
c) in a way, also don't have the wealth to inflict really serious levels of environmental damage -ie they're not the ultimate consumers of all that tropical hardwood.
d) are more directly dependent on these natural resources and so are hardest hit when they are damaged/destroyed

Mathew Reilly wrote: »

But how much was made from cutting down these forests?
Did it offset the potential future costs?

Not sure on those. But I do know illegal logging is a huge problem in Europe,as well as other places obviously. WWF released a report on it. Can't quite find the report but this is the relevant page:

http://www.panda.org/about_wwf/what_we_do/forests/problems/forest_illegal_logging/index.cfm

I'm not sure if this was taken into consideration with the EU study. It's funny because economists always say "oh there's no such thing as a free lunch" but in my mind, that's exactly what nature is (among other things).

Edit: found it:

http://www.panda.org/about_wwf/what_we_do/forests/problems/forest_illegal_logging/economic_costs_illegal_logging/index.cfm

It's on the bottom right of the page

Húrin

taconnol wrote: »

My other issue with this is that climate change seems to be the only thing people are really learning about, through the media. I think people have come to equate climate change with all other environmental issues and the result is some people think recycling helps climate change..which it does in an indirect way, but really the main issue is waste. It's also unfortunate because climate change is the most controversial environmental issue but, for example, it isn't so hard to argue with the EPA reports on water quality

Yes. It's just crazy that people don't understand that the problem is not that there's insufficient recycling - it's that there is excessive manufacturing.

I think it might be better for us activists to cease to discuss climate change as being an environmental issue, because that allows it to be sidelined to secondary importance in the minds of almost everyone, and certainly in the political realm.

DarkJager

I personally think that with the way the economy is worldwide, people are obviously going to be more concerned about money than nature. Money unfortunately makes the world go round and without it, life would be very uncomfortable.

Nature is to be respected as well, but it doesn't pay the bills....

Húrin

DarkJager wrote: »

I personally think that with the way the economy is worldwide, people are obviously going to be more concerned about money than nature. Money unfortunately makes the world go round and without it, life would be very uncomfortable.

Nature is to be respected as well, but it doesn't pay the bills....

Indeed, and this is why we need studies like this, with sentences like

Key to understanding his conclusions is that as forests decline, nature stops providing services which it used to provide essentially for free.

to gt anywhere in a culture like this. It proves to our alienated civilisation that "nature" is not some pretty optional extra, but actually crucial to our economics and our survival.