We are all been glued to the depressing headlines every day about the housing crisis, economic credit crunch, collapsing banks. On the bright side we are witnessing an unprecedented level of global cooperation to manage bailouts and rescue packages to save the worlds’ economies.I don’t think I’m alone in wondering how come we couldn’t get this level of cooperation on global climate change. Surely it is having an even greater impact on global economies.
The current financial news focuses on industrial nations of North America and Europe but here in Africa (and I’m sure it’s similar in other developing countries) we are already feeling the impact. We’re experiencing massive inflation which affects us all. Yesterday I heard about a middle class Kenyan family who are now feeding their children on anything that fills their stomach. Although they are a well educated couple, they cannot afford to balance their children’s diet. It’s a vicious cycle – the kids will be undernourished, will perform poorly at school. This will cap their own prospects and limit their capacity to escape poverty.
So, we are reacting to the financial crisis because it affects each of us individually. We approve the bail out rescue packages, and have allowed our governments to take billions of dollars from our taxes to rescue failing financial institutions.
Many environmentalists and conservationists are amazed that we can galvanize global coordination to prevent a global financial crisis; and furious that the same countries couldn’t come together and agree on a rescue package to address other global crises like climate change and poverty in developing countries.
This story appeared today on the BBC website and it stirred me to write this post because while the financial situation may be a global crisis, it is nothing compared to the unfolding environmental crisis . A new report by TEEB (The Economics of Ecosystems and Biodiversity) informs us that are racing towards catastrophic damage to our economies because of what how we are destroying biodiversity and ecosystem services.
What are ecosystem services and how dependent are we on them?
Our very existence is tied to ecosystems.
They clean our water and air; give us fertile soils; provide us with building materials and clothing (timber, cotton); pollinate our crops (bees); store carbon and stop the world from over-heating. The list goes on.
33 Billion – the annual value of these ecosystem services in US Dollars
16 Billion – the annual value of the global economy
In this study by Robert Costanza and others of 17 ecosystem services in 16 biomes, the value of ecosystem services that are not already captured in economic markets is US $15 – 54 Trillion (that’s twelve 0’s!) with an average of US $33 trillion. They emphasize that this is a minimum estimate. To put this into perspective remember that the Global economy is worth about US $16 trillion – half of what nature gives us for free.
To make this real, consider pollination services – without pollinators like bees, we would have virtually no vegetables and of course no honey! The value of pollination of our commercial crops is estimated to be US $216 billion every year. We can survive without bees, of course but imagine if we had to do all that pollination by hand!
It is this value that we do not capture in our economic evaluations. These ecosystem services are considered free public goods! There are no markets and no prices. We simply don’t count them in our national economies and they don’t feature in our economic planning.
We are trashing our ecosystems and losing a host of free services
By 2050 11% of the natural areas remaining in 2000 could be lost to agricultural expansion, the expansion of infrastructure, and climate change.
Almost 40% of the land currently under low-impact agriculture could be converted to intensive agricultural use, with further biodiversity losses
60% of coral reefs could be lost – even by 2030 – through fishing, pollution, diseases, invasive alien species, and coral bleaching due to climate change.
And climate change is exacerbating this problem.
What are the global financial implications?
In an interview here, the lead author of the TEEB report Pavan Sukhdev warns that “the fisheries that are basically going to die out in 40 years time don’t just mean $80 to 100 billion worth of lost fishing income, but also lost protein for the world’s billion poorest people”.
Nearly one-third of the world’s fisheries are severely depleted, and some have suffered complete collapse, such as the Grand Banks cod stocks off Canada’s eastern coast. If current trends continued, we will have no commercially viable marine fisheries left within fifty years.
The loss of biodiversity will have serious repercussions on the world’s economy. The TEEB report predicts we are losing forest ecosystem services at a rate of between $2 trillion and $5 trillion per year. This is the combined value of their services, including cleaning water and absorbing carbon dioxide. The situation will worsen with time as our natural stock is depleted, and we lose the services they provide. It’s a little like losing the interest from an investment, as you eat into the capital. Except that the value of the services a forest provides, is worth many times what we would make if we were to chop down the timber and sell it on the open market.
We tend to undervalue things that we get for free.
We understand the value of those things that we spill our sweat for. The TEEB report suggests that we have flawed economic analysis and we’ve been making policy mistakes. Because environmental services are ‘free’ their loss often is not detected by our current economic incentive system, losses due to deforestation, unsustainable harvesting, habitat destruction etc will continue unabated. To add salt to this wound, the world’s poor are most at risk from the continuing loss of biodiversity, as they are the ones that are most dependent on the ecosystem services that are being degraded.
How big is the problem?
Between 1900 and today we have destroyed 50% of the worlds wetlands. In addition 30% of the our coral reefs are damaged and 35% of our magroves deforested. Extinction rates are now 1000 times greater than they should be and the IUCN states that 70% of the worlds plants are in jeopardy. This is already affecting food, water and health. By 2050 7.5 million square kilometers be lost – that’s the size of Australia.
The TEEB report suggests that the cost of the loss of biodiversity today dwarfs the current financial crisis and that we urgently need a rescue package for environment.
You can read the full TEEB report here or the executive summary here.
Bailing out ecosystems
We know that our very well being is totally dependent upon these “ecosystem services” and that we are hurtling towards a crisis, and yet we are not even talking about any sort of rescue package for ecosystems. No one has dared quantify how much that would cost us.
However, the TEEB report warns that if we do not adopt the right policies, the current decline in biodiversity and the related loss of ecosystem services will continue and even accelerate. Some ecosystems are likely to be damaged beyond repair. With a “business as usual” scenario, by 2050 we, or our children and grand children will be faced with serious consequences.
I agree with Corey, the TEEB report is “Yet more evidence that we have to stop the extinction crisis”
Although it sounds horrendous, we mustn’t see this situation as hopeless. Ecosystems are far more robust than banks and economies. If we lose millions of dollars in ecosystem services by chopping down a forest, we can recover that value with a relatively small investment in forest restoration. It’ll take years but nature also has her own inbuilt repair mechanisms. We can help her to speed up the recovery by planting, protecting and managing the restoration.
Here’s an example of what can be achieved after only 30 years of forest restoration in Africa.
Tree planting with nitrogen fixing casuarina after open cast mining has stripped all the surface soil and rock at Lafarge in Mombasa Kenya
30 years later the restored ecosystem provides many services – cleaning water, producing fish, carbon sequestration, wildlife habitat, recreation and income generation. It is a global showcase and should be replicated and scaled up. You can see more about this amazing place here
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