ECONOMICS OF BIODIVERSITY

Centre contributes to the Dasgupta Review

The Dasgupta review, a landmark report commissioned by the UK Treasury urges that reform of the measurement of economic success is needed to avoid catastrophic consequences for our economies and wellbeing. Photo: P.O Gäddlin/ Azote

Groundbreaking UK Treasury report claims new financial measurements beyond GDP are needed to avoid catastrophic consequences for our economies and wellbeing

Story highlights

  • Our economies, livelihoods and wellbeing all depend on nature
  • The Dasgupta review says the world is being put at “extreme risk” by the failure of economics to take account of the rapid depletion of the natural world
  • Centre chair Carl Folke was a reviewer

"A FAULTY APPLICATION OF ECONOMICS": Unless we change how we think, act and measure economic success we will be unable to protect our prosperity and the natural world. This is the stark message of the Dasgupta review, a landmark report commissioned by the UK Treasury.

Biodiversity is declining faster than at any time in human history. Led by Professor Sir Partha Dasgupta, the report urges that reform of the measurement of economic success is needed to avoid catastrophic consequences for our economies and wellbeing.

It says that a new economic framework grounded in ecology would enable humanity to live on Earth sustainably.

Accounting for natural capital

Grounded in a deep understanding of the relationship between ecosystem processes and human economic activity, the 600-page review is visibly guided by the centre’s groundbreaking work on planetary boundaries and biosphere stewardship.

It is also strongly linked to the work Natural Capital Project, a centre partnership with Stanford University.

The use of GDP “is based on a faulty application of economics”, it says, because it measures the flow of money, not the sock of national assets. Introducing natural capital into national accounting systems would be a critical step.

“NatCap” researchers have been involved with the review at almost all stages, including centre chair Carl Folke as a reviewer.

Exacerbating the biodiversity crisis

“The Dasgupta review is a profoundly important and timely effort,” says Folke. “It clarifies that the economy and our societies are part of and embedded within the biosphere, and strongly dependent on the work of nature for our wellbeing, development and prosperity.

Commissioned by the UK Treasury, it is the first time a national finance ministry has authorised a full assessment of the economic importance of nature. The report said almost all governments were exacerbating the biodiversity crisis by paying people more to exploit nature than to protect it.

“The Dasgupta review shows that the challenges are broader than climate change alone, and that active stewardship of biosphere resilience is critical for our own future on planet Earth,” concludes Folke.

The Economics of Biodiversity: The Dasgupta Review

Published: 2021-02-05

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