Our demands versus Nature’s supply
February 2021: A fundamental change in how we think about and approach economics is needed if we are to reverse biodiversity loss and secure our prosperity, according to an independent, global review on the Economics of Biodiversity led by Professor Sir Partha Dasgupta.
Professor Dasgupta’s review 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.
The UK Government commissioned Professor Sir Partha Dasgupta to lead an independent, global Review on the Economics of Biodiversity in 2019 and The Review published its interim report in April, 2020.
The publication of the Review comes ahead of COP15 for Biological Diversity, where new long-term international targets for addressing biodiversity loss are expected to be agreed; and COP26 for climate change, where Nature and nature-based solutions to climate change are expected to play a prominent role.
Grounded in a deep understanding of ecosystem processes and how they are affected by economic activity, the framework presented by the Dasgupta Review sets out the ways in which we should account for nature in economics and decision-making.
Professor Dasgupta said: “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. It also means accounting fully for the impact of our interactions with Nature across all levels of society. Covid-19 has shown us what can happen when we don’t do this.
“Nature is our home. Good economics demands we manage it better.”
The Review 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 economies, livelihoods and well-being at risk.
It also finds that humanity has collectively mismanaged its global portfolio of assets, meaning the demands on nature far exceed its capacity to supply the goods and services we all rely on.
The Review makes clear that urgent and transformative action taken now would be significantly less costly than delay – but it will require change on three broad fronts:
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 instance by 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; and
We must transform institutions and systems – particularly finance and education – to enable these changes and sustain them for future generations. This could be done by increasing public and private financial flows that enhance natural assets and decrease those that degrade them; and by empowering citizens to make informed choices and demand change.
The full review can be read here.