{"id":70801,"date":"2021-03-23T14:52:53","date_gmt":"2021-03-23T14:52:53","guid":{"rendered":"https:\/\/chinadialogue.net\/?p=70801"},"modified":"2022-08-11T11:00:32","modified_gmt":"2022-08-11T11:00:32","slug":"can-the-global-economy-support-nature","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/nature\/can-the-global-economy-support-nature\/","title":{"rendered":"Can the global economy support nature?"},"content":{"rendered":"\n

Urgent change in how economies think, act and measure success is needed to protect and enhance global prosperity and the natural world, a major review commissioned by the UK government has recommended.<\/p>\n\n\n\n

The review<\/a>, written by leading economist Professor Sir Partha Dasgupta and published in February, concluded that humanity has collectively mis-managed its natural assets. As such, demands far exceed nature\u2019s capacity to supply the goods and services humans rely on, such as food, clean air and water, and the absorption of carbon emissions.<\/p>\n\n\n\n

Falls in biodiversity are therefore putting economies, livelihoods and wellbeing at risk, it says. Dasgupta recommended ecosystems be restored and enhanced, and that finance and education systems be transformed to take nature into account. Gross Domestic Product (GDP) \u2013 the globally dominant form of measuring economic success \u2013 does not factor in the depreciation of nature, and therefore encourages humanity to pursue unsustainable economic growth and development. Other metrics should be used, he said. The report advocates, for example, the concept of Inclusive Wealth.<\/p>\n\n\n\n

What is Inclusive Wealth?<\/strong><\/span>
\n

The social value (not dollar price) of a country\u2019s capital assets, including natural capital, human capital and produced capital. The Inclusive Wealth Index was launched by the UN in 2012 in an effort to overcome the environmental shortfalls of other indicators such as GDP and the Human Development Index. By assessing changes over time in natural capital (eg forests, watersheds, fossil fuels, fisheries), in addition to produced (manufactured) and human capital, Inclusive Wealth emphasises the changing state of a country\u2019s natural resource base, and its fundamental impact on economic and social sustainability.<\/span><\/p><\/p>\n<\/div><\/div><\/div>\n\n\n\n

Speaking to a UK parliament<\/a> committee, Dasgupta compared how businesses view assets with how economies view natural assets. \u201cNo manager will be in a position where he cannot tell you what furniture he has on his factory floor or how many workers he has\u2026 Likewise, we need to have stock accounts, not flow accounts\u2026 but most countries don\u2019t even know how many wetlands they have. Nobody cares,\u201d he said. <\/p>\n\n\n\n

Dasgupta\u2019s findings echo those of other recent reports, in particular the World Economic Forum\u2019s New Nature Economy series<\/a>, which found that $44 trillion of economic value generation \u2013 over half the world\u2019s GDP \u2013 is dependent on nature. <\/p>\n\n\n\n

Campaigners believe the review will garner mainstream attention because it was commissioned by the Treasury \u2013  the UK government\u2019s finance department \u2013 and written by an esteemed economist. A precedent can be found in the 2006 review of the economics of climate change by Nicholas Stern.  <\/p>\n\n\n\n

From review to reality <\/h2>\n\n\n\n

Though hopes have been raised by high-level responses to the review, environmental campaigners are under no illusion about the scale of the challenge in implementing its recommendations. <\/p>\n\n\n\n

\u201cCoherence between environmental ambitions and other policies and objectives is sometimes particularly difficult. That\u2019s because of all sorts of challenges with interest groups, the power dynamics in governments, and understanding of the consequences of environmental change for the economy,\u201d said Neville Ash, director of the UN Environment Programme World Conservation Monitoring Centre.<\/p>\n\n\n\n

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Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

He gave the example of the European Commission. It has ambitious environmental targets, under both its Green Deal and Biodiversity Strategy. But it is struggling to achieve agreement with the European Parliament and Council on bringing the Common Agricultural Policy \u2013 through which farmers are subsidised \u2013 into alignment with those ambitions. <\/p>\n\n\n\n

In its response<\/a> to the Dasgupta review, the WWF wants to see the creation of a Global Commission on the Economy and Nature (GCEN), modelled on the Global Commission on the Economy and Climate<\/a>, which comprises former heads of government and finance ministers and leaders in the fields of economics and business. <\/p>\n\n\n\n

If you cut down a forest and sell the timber, your GDP goes up, but of course you\u2019ve lost the forest\u201d<\/blockquote>Neville Ash, director of the UN Environment Programme World Conservation Monitoring Centre<\/cite><\/div><\/div>\n\n\n\n

The GCEN would bring together global leaders across society to develop a worldwide action plan for a nature-positive economy, building on the recommendations of the Dasgupta review, WWF says. It could promote cooperation between countries, develop policy recommendations and coordinate implementation. <\/p>\n\n\n\n

Toby Roxburgh, head of sustainable economic policy at WWF UK, said existing national-level efforts on nature need to be scaled up through international cooperation and cross-border mechanisms. Currently no mechanism or process exists that could oversee such an effort or provide such a platform and the GCEN would help to fill this gap, he said. <\/p>\n\n\n\n

A proposal for the establishment of the GCEN is gathering momentum and interest, according to WWF. Colombia\u2019s president, Ivan Duque, has already voiced his support<\/a> for the idea, and WWF wants the UK government to promote it at the next meeting of the G7, which it will host in June. <\/p>\n\n\n\n

Building momentum<\/h2>\n\n\n\n

Several countries are already accounting for the state of their forests, wetlands and other natural capital in novel ways, according to Ash. For example, over 100 nations are part of the UN\u2019s System of Environmental-Economic Accounting (SEEA)<\/a>, he said. <\/p>\n\n\n\n

This system was officially adopted by the UN Statistical Commission in mid-March, marking \u201ca major step forward\u201d that goes beyond the use of GDP, according to the UN, and more countries are preparing to sign up.<\/p>\n\n\n\n

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Recommended<\/span><\/span><\/div><\/a>\n\n\n\n

The Dasgupta review is giving additional momentum to what was already happening in these countries, Ash said. \u201cThere\u2019s a recognition that we can\u2019t continue to use solely GDP as a measure of wealth \u2013 if you cut down a forest and sell the timber, your GDP goes up, but of course you\u2019ve lost the forest,\u201d he said. <\/p>\n\n\n\n

\u201cWill we see countries replacing GDP? I don\u2019t think so anytime soon,\u201d Ash said. \u201cBut what we\u2019re seeing is development of other measures alongside GDP to better understand the state of the economy, and particularly the wealth of nations in relation to stocks as well as financial flows,\u201d he added. <\/p>\n\n\n\n

Roxburgh agreed there are signs finance ministries were becoming more aware of these issues. In 2019, New Zealand published the world\u2019s first \u201cwellbeing budget<\/a>\u201d, which measures economic success based on how it delivers on natural as well as human, social, financial and physical capitals, he noted. <\/p>\n\n\n\n

UK leadership?<\/h2>\n\n\n\n

WWF is urging the UK to lead by example, given that it commissioned the review, and is hosting the G7 and COP26 climate talks later this year. The government welcomed it but is still considering what actions to take in response, according to Treasury minister Kemi Badenoch, who chaired the review\u2019s advisory panel.   <\/p>\n\n\n\n

She told<\/a> MPs in March that the review\u2019s findings could be incorporated into the Green Book which the Treasury issues to government officials to help them appraise the environmental and climate impacts of policies and projects.<\/p>\n\n\n\n

\u201cI imagine that biodiversity is going to be one of those things that we would like to incorporate into that work,\u201d she said. The UK has made nature a key theme of COP26, and would be taking forward discussions on accounting for nature and climate change through the UN talks and the G7, Badenoch added. <\/p>\n\n\n\n

The UK government budget, published a couple of weeks after the Dasgupta review, included a proposal to expand the monetary policy remit for the Bank of England to reflect the importance of environmental sustainability and the transition to net zero. This could become a \u201cgame changer\u201d for how nature and climate change are taken into account economically, according to WWF. <\/p>\n\n\n\n

COP15 biodiversity talks<\/h2>\n\n\n\n

Though finance ministries need to play a key role in transforming economies to be more nature-friendly, in the end, success would look different from one country to the next, Roxburgh said. \u201cSome transformations, especially to the global finance system, will require global interventions and cooperation,\u201d he said. <\/p>\n\n\n\n

Ash said UN talks on the new global targets to protect biodiversity at COP15, which China is due to host in Kunming this year, also had a role to play in tackling the challenges laid out by Dasgupta, such as reforming perverse subsidies, making sure money flows into sustainable economic activity, and ensuring that consumption and production are sustainable. <\/p>\n\n\n\n

\u201cThere are lots of big underlying issues beyond the relatively straightforward ones that often grab the headlines, around protecting more of the planet and species recovery programmes. It\u2019s not just a problem of agreeing a global set of targets and then having national priorities which aren\u2019t aligned with those,\u201d he said.

<\/p>\n","protected":false},"excerpt":{"rendered":"

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