Wednesday, October 19, 2011

Economic Value of Ecosystems and Biodiversity

The United Nations Environment Program hosts the international initiative of The Economics of Ecosystems and Biodiversity (TEEB), which shows the value of nature in economic terms.

Have you ever wondered what are the costs for the services that nature provides to humanity and other forms of life on the planet? Clean the air and water, allow for food to grow on fertile soil, even the availability of minerals and other natural resources that are consumed by humans and other species.

Keep in mind that oil is the result of a natural process through which decayed vegetation and other living forms have been compressed over millions of years to form the thick, energy-rich substance. It is provided by nature and it would take millions of years more to naturally generate more. In fact, humans cannot create oil from fallen trees.

According so some estimates, the global economy is about US$40 trillion a year, and nature represents about US$18 trillion a year. The cost of using nature is not being paid by anyone, which doesn't mean it is free. If we use nonrenewable natural resources, they are gone forever and that natural value is lost. If we, in addition, exhaust renewable resources, like fertile soil or trees, we are also reducing the value of nature permanently.

The problem comes when we think that, in the long run, we could be reducing the natural capital of the planet to the point where consumption is greater than production. At that point, we would be in what ecologists refer to "overshoot", or the impossibility of an ecosystem -in this case, the entire planet- to regenerate its biocapacity on its own in time for it to be used again. Well, according to the Global Footprint Network we have reached overshoot around 2005. Now we are reducing our natural capital every day that goes by.

Linking this ecological problem to the economy is important, because our global economy is not growing much more, while the ecological value has been decreasing. A paradigm shift requires that we think of ways in which we can transform the economy in a way that it ensures that our behavior will be restoring the ecosystem, allowing nature to restore itself.

That's what TEEB is all about. A promise -with sensible, clear numbers- of an economy that provides for the environment and an environment that provides for the economy.

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