Landmark review calls for nature to be included in economic decision making
A new landmark review has been launched today (2 February), outlining how businesses and policymakers can include and account for nature as part of economic decisions, with many claiming the findings could be as influential as the Stern review on climate change.
The UK Government commissioned Professor Sir Partha Dasgupta to lead an independent, global Review on the Economics of Biodiversity in Spring 2019. One of the main aims of this review on the ‘Economics of Biodiversity’ was to create insight into how financial and policy decisions can reverse biodiversity loss.
It is the largest and most comprehensive review of its kind, that explores the role of natural capital in delivering planetary, societal and economic prosperity. Natural capital accounting assigns a monetary value to natural resources like forests and healthy soil, allowing businesses to calculate the “true cost” of their decisions.
Prime Minister Boris Johnson said: “This year is critical in determining whether we can stop and reverse the concerning trend of fast-declining biodiversity. I welcome Professor Dasgupta’s Review, which makes clear that protecting and enhancing nature needs more than good intentions – it requires concerted, co-ordinated action.
“As co-host of COP26 and president of this year’s G7, we are going to make sure the natural world stays right at the top of the global agenda. And we will be leading by example here at home as we build back greener from the pandemic through my Ten-Point-Plan.”
The new framework, dubbed the Dasgupta Review, has been commissioned by HM Treasury and lays out key recommendations to reversing manmade declines in biodiversity that are undermining the productivity, resilience and adaptability of nature. The review warns that this historic decline has placed economies and livelihoods at risk.
The review finds that humanity had mismanaged its natural assets and the demands on nature now far exceed its capacity to supply resources and vital services. The review calls for the expanding and improvement of Protected Areas as well as increasing investment into nature-based solutions. Policies should also be created or tweaked to discourage damaging consumption of natural assets.
It also calls for different metrics to be adopted that would align natural resources with today’s economic accounting, as part of a shift towards a more inclusive measure of wealth. As such, introducing natural capital into national accounting systems is a critical step.
Professor Dasgupta said: “Truly sustainable economic growth and development means recognising that our long-term prosperity relies on rebalancing our demand of nature’s goods and services with its capacity to supply them.
“It also means accounting fully for the impact of our interactions with Nature across all levels of society. Covid-19 has shown us what can happen when we don’t do this. Nature is our home. Good economics demands we manage it better.”
It is hoped the review will be as critically important to the political understanding on the importance of biodiversity as the Stern Review on the Economics of Climate Change, which has helped frame the climate crisis through the lens of potential economic damage and shape political frameworks.
It is the latest piece of work, supported by the UK Government, to gain an understanding as to how nature-based solutions can help meet climate commitments.
The Natural Capital Committee (NCC), which was founded in 2012 and works as an independent advisor to Defra, published its ‘end of term report’ late last year. the report recommends that Defra and BEIS collaborate to “urgently” take forward the template the Committee has developed to help corporates begin assessing and minimising their natural capital impacts.
It recommended that ministers engage with the Taskforce for Nature-Related Disclosures (TFND) and its members to understand best-practice. The TFND is due to publish its framework in 2021, building on previous research by the UK and Swiss governments and by WWF and Global Canopy. Accounting and reporting bodies should also be involved, the NCC recommends.
Also included in the report was a call for Defra to replace the ‘biodiversity net-gain’ requirements currently placed on some sectors, including housebuilding, to be expanded to ‘environmental net gain’. This broader scope will help businesses avoid unintended negative consequences and to ensure that their positive impact lasts.
More broadly, the report urges Defra to accelerate its work to enshrine legally binding interim targets on nature in the Environment Bill. The Department has confirmed that the Bill will include statutory targets on air pollution, water and biodiversity when it returns to Parliament.
edie has published a separate piece on the industry reaction to the Dasgupta Review, which can be read via the homepage.