Book: The Economics of Ecosystems and Biodiversity: Ecological and Economic Foundations

October 9th, 2010 by Richard Lord

Earthscan has released The Economics of Ecosystems and Biodiversity: Economic and Ecological Foundations.

The Economics of Ecosystems and Biodiversity – is a collaboration of the world’s leading environmental economists and biodiversity experts, set up to establish how to incorporate the value of nature and the services it provides into economic thought and calculations, and into all the policy and practical decisions that flow from them.

The final definitive results of the study are being published by Earthscan over the next year in four volumes, the first published on 5 October 2010 lays out the foundations of this fundamental and crucial advance.

In particular The Economics of Ecosystems and Biodiversity: Economic and Ecological Foundations:

  • Explains the development of the concept of ecosystem services, and describes the TEEB framework used for their valuation
  • Reviews the current state of knowledge on the relationships between biodiversity, ecosystems and the services they provide
  • Shows how valuation can help people rethink their relation to the natural environment
  • Explores the social, cultural and ethical issues involved in valuing ecosystem services
  • Provides detailed discussion of the application of the different monetary valuation techniques

Lord Nicholas Stern, whose Report on the economics of climate change, which used a similar approach to quantify the costs and savings of reducing climate change said ‘TEEB is a very timely and useful study not only of the economic and social dimensions of problem, but also of a set of practical solutions which deserve the attention of policy-makers around the world.’

Human well-being relies critically on ecosystem services provided by nature. Examples include water and air quality regulation, nutrient cycling and decomposition, plant pollination and flood control, all of which are dependent on biodiversity. They are predominantly public goods with limited or no markets and do not command any price in the conventional economic system, so their loss is often not detected and continues unaddressed and unabated. This in turn not only impacts human well-being, but also seriously undermines the sustainability of the economic system.

It is against this background that TEEB: The Economics of Ecosystems and Biodiversity project was set up in 2007 and led by the United Nations Environment Programme to provide a comprehensive global assessment of economic aspects of these issues. This book, written by a team of international experts, represents the scientific state of the art, providing a comprehensive assessment of the fundamental ecological and economic principles of measuring and valuing ecosystem services and biodiversity, and showing how these can be mainstreamed into public policies.

This volume and subsequent TEEB outputs will provide the authoritative knowledge and guidance to drive forward the biodiversity conservation agenda for the next decade.

Dr. Pavan Sukhdev on the ‘TEEB’ project

“If we look at the impacts of a corporation’s activities on society at large, beyond profits, we find that almost $2.25 trillion dollars of costs are imposed on society – carbon emissions, greenhouse gas emissions, which are damaging to the economy and to the climate, freshwater usage, pollutants and chemicals, which are released into the atmosphere, or are released into water or into soils, and cause damage to human health – so all of these – if we calculate the economic sizing of these damages that is almost $2.25 trillion.  It is not an acceptable situation that such a large external cost is imposed upon society by the actions of corporations, and they are not doing this because they want to harm society.  They are doing this because the system allows them to do it, and indeed the system is focused on creating corporations as just profit engines – financial profit engines.

Why are some things worth money and other things not?  Economics treats the community and its benefits – family, friendship that we get as externalities.  It treats Nature and its flows and its benefits as externalities, and the question was very simple and very important.  Why?  Why must we not account for these?  We must we not understand that these things are valuable even if they don’t have a price, which is measured in money terms, so to me this was a passion, it was a passion that I felt I needed as a citizen of the planet to invest my time and energy in because I kind of understood the issue perhaps earlier than the average man on the street and I felt it was my duty to bring it out  – do as much work to develop this issue and understand why is it that we can’t seem to account for what’s valuable.

The invisible economy.  You don’t know what your economy is because more than half your economy is invisible to you.  The economic value of nature and its services is not captured by your mechanisms. Freshwater security is a problem, food security is a problem, energy security is an issue, fish are drying up to the point where they are less than a tenth than what they should be.  These are examples of ecological scarcities driven by a lack of appreciation of the values that flow into the economy from nature.  And that means that nature is economically invisible.  That’s not a good thing.  Make it economically visible by accounting for these values.  Accounting for the free flows you are getting from nature, and once you start accounting for them and recognising the value that arrives from them you will do what is obvious.  Nobody ever, ever voluntarily destroys his own house but we are voluntarily leaving our best productive assets – that is natural assets, ecological infrastructure – we are voluntarily depleting it day-by-day.  We wouldn’t do that to a factory or a house or a car.  Why do we do that to a forest or a wetland?”

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