Pavan Sukhdev: Put a value on nature!

Summary

The speaker addresses the economic invisibility of nature, highlighting the significant yet unaccounted value of natural capital to human society. They discuss the TEEB project, which aims to quantify nature's contributions and the urgent need for recognizing and integrating natural capital into economic systems. Examples include the Amazon's role in rainfall and agriculture, the value of pollination, and the impact of deforestation on China's economy. The talk emphasizes the importance of distinguishing between public benefits and private profits, advocating for green accounting and carbon markets to prevent further degradation of natural assets.

Takeaways

• 🌿 The economic invisibility of nature is a significant issue, as the value of nature's contributions to human well-being is not reflected in market pricing.
• 📈 The TEEB project, initiated in 2007 by environment ministers, aims to highlight the economic case for nature conservation, similar to the Stern Review's impact on climate change policy.
• 💔 There is a startling loss of natural capital, estimated at two to four trillion dollars, comparable to the financial losses during the banking crisis.
• 🌊 The Amazon rainforest, a vital 'rain factory,' contributes significantly to the agricultural economy of Latin America but receives no monetary value for its services.
• 🐝 The economic value of ecosystem services like pollination by bees and genetic resources from nature, which are crucial for medicines and food, often goes unrecognized and unpaid.
• 💰 The economic incentives and disincentives are powerful drivers of policy, and addressing the 'invisibility' of nature's value is essential to prevent further degradation of natural assets.
• 🌳 The importance of recognizing natural capital and incorporating it into economic systems is emphasized, as it is currently excluded from measures like GDP and corporate performance.
• 🔢 The Green Accounting Project and the WAVES initiative by the World Bank are examples of efforts to account for natural capital in economic measurements.
• 🌱 Companies like PUMA have taken steps to measure and disclose their environmental externalities, setting an example for transparency and corporate responsibility.
• 💼 The creation of green carbon markets and the valuation of ecosystem services are proposed solutions to better integrate the value of nature into economic activities.
• ⚠️ The potential loss of coral reefs due to climate change poses a significant risk to the livelihoods of over 500 million people, highlighting the urgent need for ethical and sustainable development choices.

Q & A

What is the concept of 'economic invisibility of nature' mentioned in the script?

The 'economic invisibility of nature' refers to the failure of current economic systems to account for the value of natural resources and services provided by nature, which are often not priced by the markets, leading to their undervaluation and degradation.

What was the TEEB project initiated in 2007 aimed at addressing?

The TEEB (The Economics of Ecosystems and Biodiversity) project was initiated to make a convincing case for the conservation of nature, similar to what the Stern Review did for climate change, by highlighting the economic value of ecosystems and biodiversity.

What was the startling revelation from the TEEB project's interim report in 2008 regarding the loss of natural capital?

The interim report revealed that the world was losing natural capital at an extraordinary rate, estimated to be around two to four trillion dollars-worth, which was comparable in size to the financial capital lost during the banking crisis of the same period.

How does the Amazon rainforest contribute economically, and why is this contribution often overlooked?

The Amazon rainforest acts as a 'rain factory,' contributing to a rainfall cycle that supports an agricultural economy worth around 240 billion dollars in Latin America. However, this contribution is often overlooked because it is not directly monetized or paid for by the regions benefiting from it, exemplifying the economic invisibility of nature.

What is the significance of insect-based pollination in global agriculture, and why does it often go unrecognized?

Insect-based pollination, primarily by bees, contributes around 190 billion dollars to global agricultural output, which is about 8 percent of the total. It often goes unrecognized because it operates as a natural service without direct monetary transactions, thus escaping the radar of traditional economic measures.

Why is it important to recognize and account for natural capital in economic systems?

Recognizing and accounting for natural capital is crucial because it helps to internalize the true cost and value of nature's contributions to the economy. This can lead to more sustainable practices and policies that prevent the degradation and loss of valuable natural assets.

What is the role of the 'WAVES' project initiated by the World Bank in relation to natural capital?

The WAVES (Wealth Accounting and Valuation of Ecosystem Services) project by the World Bank aims to integrate the value of natural capital into national economic accounts, providing a more comprehensive measure of a country's wealth and well-being.

How did the TEEB project approach the issue of deforestation in China, and what were the findings?

The TEEB project conducted a detailed analysis of the costs associated with deforestation in China, including loss of topsoil, waterways, and local community impacts. It found that these costs were almost twice as much as the market price of timber, indicating that the true social costs were not being reflected in the market.

What is the concept of 'green carbon markets' and why are they important?

Green carbon markets are mechanisms that value and trade carbon stored in natural environments like forests and oceans (blue carbon). They are important because they can provide economic incentives for conservation and restoration of these ecosystems, which are critical for climate change mitigation.

What is the significance of coral reefs in terms of biodiversity and human livelihoods, and what threat do they face from climate change?

Coral reefs are biodiversity hotspots that provide food and livelihoods for over half a billion people. They face a significant threat from climate change, particularly ocean acidification due to increased carbon dioxide levels, which can lead to the extinction of coral species and the collapse of fisheries.

What ethical implications are raised by the speaker regarding the global climate targets and the potential loss of coral reefs?

The speaker raises the ethical implications of the global climate targets, suggesting that by aiming for a certain level of carbon dioxide in the atmosphere, we are making an implicit choice to risk the loss of coral reefs and the livelihoods of millions of people who depend on them, highlighting the need for more responsible and considerate climate policies.