The Value of Nature

Renowned economist Dasgupta's groundbreaking report, "The Economics of Biodiversity," highlights the urgent need to integrate nature's value into an economic framework. Currently, the true value of nature to society is not adequately reflected in market prices, as much of it is freely accessible. To rectify this, Dasgupta argues for a fundamental reassessment of nature's importance, placing it on an equal footing with human and financial capital in decision-making processes. This paradigm shift calls for the adoption of inclusive wealth measures, similar to China's Gross Ecosystem Product, which capture the value and depreciation of our natural capital assets.

To assign a tangible monetary value to nature, initiatives like the natural capital accounting protocol have gained traction. By incorporating natural capital into national and corporate balance sheets, we can establish a consensus on nature's value, leading to the formulation of more effective nature-based policies and fostering investment in businesses that have a positive impact on nature. By aligning investment decisions with the value of nature, we can better address climate events and capitalise on opportunities related to nature.

Beyond recognising the economic value of nature, we must acknowledge its intrinsic worth and prioritise its protection over reckless destruction. The decline of nature poses an existential threat to humankind and other living organisms, especially in the face of rapid population growth.

Alarming statistics reveal that global subsidies amounting to $4-6 trillion USD per year contribute to the degradation of nature. Forested areas have declined by 20% since 1970, with 30% of tree species facing the risk of extinction. Soil degradation, wetland loss, and the destruction of coral reefs further compound this crisis. Dasgupta's findings underscore our excessive reliance on natural resources, with our current consumption rate requiring 1.6 Earths to sustain it.

The planetary boundaries set forth by the Stockholm Resilience Centre serve as a stark reminder of the delicate balance necessary for human thriving. Worryingly, we have already breached four out of the nine boundaries, placing our planet's equilibrium in jeopardy. Urgent and coordinated investment in preserving and restoring nature is not only imperative but also presents an opportunity to address these threats while unlocking untapped potential.

Investing in nature is not solely an ethical imperative; it also offers substantial commercial opportunities. Nature contributes approximately $44 trillion USD annually to the global economy, with over half of the world's GDP moderately or highly reliant on it. By redirecting subsidies from activities that harm nature toward investments that support it, and with the support of governments and businesses, we can mitigate the effects of climate change, facilitate environmental recovery, and reap numerous benefits for society.

Nature-based investments offer attractive risk-adjusted returns and often have lower costs compared to emerging technologies. Governments and businesses that strategically invest in nature can enhance their resilience and outperform competitors, particularly in times of economic austerity. Streamlining nature-based policies, including regulations that mandate biodiversity net gain, and incorporating natural capital into balance sheets are critical steps toward ensuring transparency and accountability.

In summary, our commitment to the Paris Agreement and the broader goal of combating climate change cannot be fulfilled without addressing and preserving our natural environment, including water, air, and land. Recognising the value of nature, both intrinsically and economically, is a call to action. By integrating nature into our decision-making processes, investing in its preservation, and embracing nature-based solutions, we can secure a sustainable and prosperous future for generations to