The Dasgupta Review states natural capital, like produced and human capital, should be viewed as an economic asset, arguing that the global economy is dependent on and embedded in Nature.
The report recommends that: humanity ensure its demands on Nature do not exceed Nature’s supply; natural capital be introduced into national accounting systems; and institutions, particularly financial and educational, be transformed.
The UK Government has published an independent review that provides a global assessment of the economic benefits of biodiversity and the costs of biodiversity loss, and recommends actions to simultaneously enhance biodiversity and deliver economic prosperity.
In 2019, the UK Government commissioned Cambridge University economist Partha Dasgupta to provide a global review on the economics of biodiversity. Following the publication of an interim report in April 2020, the final publication titled, ‘The Economics of Biodiversity: the Dasgupta Review,’ was issued ahead of the 15th meeting of the Conference of the Parties (COP 15) to the Convention on Biological Diversity (CBD). The publication’s formal launch, hosted by the Royal Society, took place on 2 February 2021.
By bringing economics and ecology face to face, we can help to save the natural world and in doing so save ourselves.
The report argues that natural capital, long ignored by economic thought, should be viewed as an asset, like produced and human capital. As such, humanity’s demands on Nature for natural resource extraction and waste disposal have far exceeded Nature’s ability to supply, putting the prosperity of current and future generations at risk. According to the review, while between 1992-2014 produced capital (such as manufactured goods) doubled per capita, and human capital (such as health, knowledge, and skills) increased 17% per capita, Natural capital declined 40% per person. “Biodiversity is declining faster than at any time in human history,” the report warns, undermining Nature’s productivity, resilience, and adaptability, which results in extreme economic risk and uncertainty. In short, rather than being separate from Nature, as it has long been the prevailing thought, the report argues that the global economy is dependent on and embedded in Nature.
At the heart of the problem, the report claims, is market and institutional failure. Market prices do not reflect the true value of the goods and services that Nature provides for free, which has lead to underinvestment in natural, versus produced, assets – and governments pay people far more to exploit Nature than to protect it. Meanwhile, the review states, there is a dearth of institutional arrangements to protect global public goods, such as the rainforests and oceans.
The report recommends three broad transitions. First, humanity’s demands on Nature must not exceed Nature’s supply, and that supply must be increased relative to current levels. The report recommends enhancing management of protected areas, increasing investment in Nature-based solutions, addressing unsustainable practices in food and energy production, and empowering more sustainable fertility choices. Second, natural capital must be introduced into national accounting systems as gross domestic product (GDP) does not account for asset depreciation. Third, financial institutions must be transformed, and environmental awareness must be introduced to education programmes.
The report concludes on an optimistic note by stating that “the same ingenuity that led us to make demands on Nature that are so large, so damaging and over such a short period, can be redeployed to bring about transformative change, perhaps even in just as short a time.”
English broadcaster, writer, and naturalist David Attenborough, welcomed the report, which, he said, “shows us how by bringing economics and ecology face to face, we can help to save the natural world and in doing so save ourselves.” British Prime Minister Boris Johnson stated that, as co-host of the Glasgow Climate Change Conference (COP 26) and 2021 president of the Group of 7 (G7), the UK is “going to make sure the natural world stays right at the top of the global agenda.” [Publication: The Economics of Biodiversity: The Dasgupta Review] [Headline Messages] [Report Landing Page] [UK Government News Story]
By Gabriel Gordon-Harper, Thematic Expert on Climate Change and Sustainable Energy