Is the global economy designed to consume biodiversity?
Partha Dasgupta and Simon Levin present a comprehensive analysis of the economic factors contributing to biodiversity loss in their article titled "Economic Factors Underlying Biodiversity Loss".
They propose a new grammar for economic reasoning that acknowledges humanity's embeddedness in nature:
- They argue contemporary economic thinking, including the economics of climate change, fails to recognise that humans are part of nature, instead viewing us as customers drawing on nature's resources.
- The authors provide examples of how the current ecological crisis was brought up by errors in economic reasoning, such as the management of property rights regarding natural services considered global public goods.
- They identify necessary institutional reforms for managing global public goods like oceans and tropical rainforests as an "inclusive wealth", which measurement by national statistical offices could complement GDP.
- Excessive trade liberalisation without consideration for local ecosystems leads to a transfer of wealth from exporting to importing countries.
- Human activities at all levels, from households to global communities, should be reshaped to take into account how we deploy our capital stocks, including ecosystems.
This approach highlights the potential risks associated with investments that do not consider their impact on local ecosystems, drawing on nature's services beyond its ability to supply them sustainably.
It would be valuable to explore further how the concept of inclusive wealth could be operationalised in practice by developing indicators to measure wealth in a way that includes the value of ecosystems.