NEWS • 2021-02-02
Review: “Nature is a blind spot in economics that we ignore at our peril”
A fundamental change in how we think about and approach economics is needed if we are to reverse biodiversity loss and protect and enhance our prosperity, says a new independent landmark review on the Economics of Biodiversity.
First economic framework for biodiversity
Beijer Fellow Professor Sir Partha Dasgupta’s review, commissioned by the UK Treasury, presents the first comprehensive economic framework of its kind for biodiversity. It calls for urgent and transformative change in how we think, act and measure economic success to protect and enhance our prosperity and the natural world.
Grounded in a deep understanding of ecosystem processes and how they are affected by economic activity, the new framework presented in the Dasgupta Review sets out the ways in which we should account for nature in economics and decision-making.
It argues that nature is our most precious asset and that significant declines in biodiversity are undermining the productivity, resilience and adaptability of nature. This in turn has put our economies, livelihoods and well-being at risk.
Partha Dasgupta writes: “Truly sustainable economic growth and development means recognising that our long-term prosperity relies on rebalancing our demand of nature’s goods and services with its capacity to supply them. To detach nature from economic reasoning is to imply that we consider ourselves to be external to nature. The fault is not in economics; it lies in the way we have chosen to practise it”.
Strong roots in Beijer Institute research
Partha Dasgupta was the Beijer Institute’s first chair of the Board, and in the review’s preface he acknowledges the importance of the cooperation with its founder, the late Karl-Göran Mäler, and the broader Beijer network of ecologists and economists that he was part in forming.
“My education in what is the substance of the Review began in the late 1970s in conversations with Karl-Göran Mäler”, he says. Dasgupta and Mäler later worked together in a research program on the environment and emerging development issues.
“But it wasn’t until 1991 when Mäler asked me to serve as Chair of the Beijer Institute’s Scientific Advisory Board, that we were able to pursue the programme jointly with ecologists. The Institute’s mandate made it possible, which was unusual at that time, for ecologists and economists to conduct a regular series of workshops in ecological economics. “
Those workshops led to international research programs, several of which led to the body of research the review is founded on.
Beijer director, Carl Folke, was one of the reviewers of “the Economics of Diversity” together with several other Beijer Fellows:
“The Dasgupta review is a profoundly important and timely effort. It clarifies that the economy and our societies are strongly dependent on the work of nature for our wellbeing, development and prosperity. It shows that the challenges is broader than climate change alone and that active stewardship of biosphere resilience is critical for our own future on planet Earth.”
This insight was echoed by British Prime minister Boris Johnson at the review launch 2 February: “Far from being separate, Economy and ecology are in fact inseparably intertwined”
Transformative action needed now, and cheaper in the long run
The Review makes clear that urgent and transformative action taken now would be significantly less costly than delay and will require change on three broad fronts, it also suggests many solutions.
• Humanity must ensure its demands on nature do not exceed its sustainable supply and must increase the global supply of natural assets relative to their current level. For example, expanding and improving management of Protected Areas; increasing investment in Nature-based Solutions; and deploying policies that discourage damaging forms of consumption and production.
• We should adopt different metrics for economic success and move towards an inclusive measure of wealth that accounts for the benefits from investing in natural assets and helps to make clear the trade-offs between investments in different assets. Introducing natural capital into national accounting systems is a critical step.
• We must transform our institutions and systems – particularly finance and education – to enable these changes and sustain them for future generations. For example, by increasing public and private financial flows that enhance our natural assets and decrease those that degrade them; and by empowering citizens to make informed choices and demand change, including by firmly establishing the natural world in education policy.
Putting things right to save ourselves
Sir David Attenborough, broadcaster and naturalist who have spent his life showing audiances around the world the magic of nature’s biodiversity, wrote the review foreword and attended the launch:
“The survival of the natural world depends on maintaining its complexity, its biodiversity. Putting things right requires a universal understanding of how these complex systems work. That applies to economics too. This comprehensive and immensely important report shows us how by bringing economics and ecology face to face, we can help to save the natural world and in doing so save ourselves.”