Economists fail to account for ‘natural capital’ –

Created 4 years ago by Natural Choices Media

Many economists are failing to assess the value of their countries’
natural resources, putting billion’s of people’s well-being at risk and
contributing to catastrophic species loss, according to a new United
Nations Environment Programme report.(Source WWF)

The
Economics of Ecosystems and Biodiversity for National and International
Policy Makers 2009 (TEEB), released today, states that governments must
adopt better accounting systems that measure the true value of natural
resources, and integrate them in government decision-making.

WWF welcomed the report, urging governments to heed the call to
reform their economic policies to halt the destruction of natural
resources.

“Governments need to pay attention to this report and start looking
at nature in a more holistic way”, said WWF Director of Global and
Regional Policy Gordon Shepherd, “With smarter approaches to economics
this can change but right now we are paying for their ignorance.”

Investing in conservation, management and restoration of ecosystems
will provide economic returns and services to society that outweigh the
immediate monetary returns of unchecked use of natural resources, such
as the clear-cutting of forests or overfishing, according to the report.

“We are running down our natural capital stock without understanding the value of what we are losing” the report states.

“Degradation of soils, air, water and biological resources can
negatively impact on public health, food security, consumer choice and
business opportunities. The rural poor, most dependent on the natural
resource base, are often hardest hit,” according to the report.

“The problem is that economists do not give market prices for
ecosystem services and biodiversity,” according to the study. “This
means that the benefits we derive from these goods (often public in
nature) are usually neglected or under-valued in decision-making.”
“This in turn leads to actions that not only result in biodiversity
loss, but also impact on human well-being.”

The report also makes several recommendations for policy-makers.

They include, for example, that policy must address reforming
environmentally harmful subsidies – up to a third of which currently
support fossil fuel use – and invest in ‘ecological infrastructure’.
The latter “can provide cost-effective opportunities to meet policy
objectives, such as increased resilience to climate change, reduced
risk from natural hazards, and improved food and water security as a
contribution to poverty alleviation.”

In addition, Shepherd said businesses must likewise re-evaluate
their use of the natural resources on which they depend to ensure their
long-term profits. In doing so, they can be part of the solution to
current environmental crises, such as species loss and deforestation.

“Ultimately, this must be a wide-ranging effort to re-evaluate
natural resources and it must involve everyone, including private
industry, governments, international agreements like the Convention on
Biological Diversity, and indigenous and local people,” said Shepherd.
“It will take a concerted effort to make our planet healthy again.”

TEEB’s study on The Economics of Ecosystems and Biodiversity was
launched by Germany and the European Commission in response to an
earlier G8+5 Environment Ministers proposal to develop a global study
on economics of biodiversity loss.