Wednesday, March 29, 2023

The Economics of Biodiversity: The Dasgupta Review

The UK government commissioned Partha Dasgupta to prepare a review: The Economics of Biodiversity. The complete text, along with various abridgments, is available on the web. Here's 9 key takeaways.

From Dasgupta's preface to the complete review:

As this is a global Review, I often speak of the demands humanity makes on Nature. But much of the time the Review is obliged to look closely at smaller scales and local engagement with Nature. Differences in the way communities are able to live tell us that people do not experience increasing resource scarcity in the same way. Food, potable water, clothing, a roof over one’s head, clean air, a sense of belonging, participating with others in one’s community, and a reason for hope are no doubt universal needs. But the emphasis people place on the goods and services Nature supplies differs widely. To farmers in South Asia and Sub-Saharan Africa, it could be declining sources of water and increasing variability in rainfall in the foreground of global climate change; to indigenous populations in Amazonia, it may be eviction not just from their physical home, but from their spiritual home too; to inhabitants of shanty towns everywhere, the worry may be the infections they are exposed and subjected to from open sewers; to the suburban household in the UK, it may be the absence of bees and butterflies in the garden; to residents of mega-cities, it could be the poisonous air they breathe; to the multi-national company, it may be the worry about supply chains, as disruptions to the biosphere make old sources of primary products unreliable and investments generally more risky; to governments in many places, it may be the call by citizens, even children, to stem global climate change; and to people everywhere today, it may be the ways in which those varied experiences combine and give rise to environmental problems that affect us all, not least the COVID-19 pandemic and other emerging infectious diseases, of which land-use change and species exploitation are major drivers. Degradation of Nature is not experienced in the same way by everyone.

Nature has features that differ subtly from produced capital goods. The financier may be moving assets around in his portfolio, but that is only a figure of speech. His portfolio represents factories and ports, plantations and agricultural land, and mines and oil fields. Reasonably, he takes them to be immobile. In contrast, Nature is in large measure mobile. Insects and birds fly, fish swim, the wind blows, rivers flow, and the oceans circulate, and even earthworms travel. Economists have long realised that Nature’s mobility is one reason the citizen investor will not take the market prices of natural capital to represent their social worth even when markets for them exist. The Review studies the wedge between the prices we pay for Nature’s goods and services and their social worth (the Review calls their social worth ‘accounting prices’) in terms of what economists call ‘externalities’. Over the years a rich and extensive literature has identified the measures that can be deployed (the forces of the law and social norms) for closing that wedge. The presence of the wedge is why the citizen investor will insist that companies disclose activities along their entire supply chain. Disclosure serves to substitute for imperfect markets.

But in addition to mobility, Nature has two properties that make the economics of biodiversity markedly different from the economics that informs our intuitions about the character of produced capital. Many of the processes that shape our natural world are silent and invisible. The soils are a seat of a bewildering number of processes with all three attributes. Taken together the attributes are the reason it is not possible to trace very many of the harms inflicted on Nature (and by extension, on humanity too) to those who are responsible. Just who is responsible for a particular harm is often neither observable nor verifiable. No social mechanism can meet this problem in its entirety, meaning that no institution can be devised to enforce socially responsible conduct. It would seem then that, ultimately, we each have to serve as judge and jury for our own actions. And that cannot happen unless we develop an affection for Nature and its processes. As that affection can flourish only if we each develop an appreciation of Nature’s workings,

the Review ends with a plea that our education systems should introduce Nature studies from the earliest stages of our lives, and revisit them in the years we spend in secondary and tertiary education. The conclusion we should draw from this is unmistakable: if we care about our common future and the common future of our descendants, we should all in part be naturalists.

No comments:

Post a Comment