The economic value of nature
New research published in the journal Nature Sustainability led by University of Cambridge and the Royal Society for the Protection of Birds (RSPB) proves that exploiting nature is a bad financial decision. The economic value of nature has resonated for longer amongst global leaders and a new statistical framework was launched worldwide on 11 March 2021.
The study gathered data from around the globe: across six continents with 24 main sites, with 38 additional areas. For these areas the scientists calculated the financial gain of both their “ecosystem services” like carbon sequestering or flood protection, and also the possible financial gains from the production of goods like water and timber. Based upon this input, scientist calculated their financial worth and projected this over the next 50 years. It’s the largest ever study that compares the value of protecting nature at particular locations with that of exploiting it.
Even if you are only interested in dollars and cents, we can see that conserving and restoring nature is now very often the best bet for human prosperity.
Economic outputs from natural sites were compared to sites nearby where conversion for human exploitation had already taken place – the results showed an overwhelming economic value of nature.
To calculate the financial benefits, the TESSA tool was used, which is designed specifically to compare the financial gains from a site depending on its usage, allowing for the comparison of an ecosystem service vs. an agricultural area for example. The data comes from 62 sites: 24 main sites with extensive financial information and 38 with limited information, but enough to make projections. When looking at for example carbon sequestration, the scientists concluded that “70% of the sites have greater monetary value as natural habitats, including 100% of forest sites” – this was based on the price of $31 to global society for each tonne of carbon produced, which is generally believed to be a very modest estimate. But even if carbon would not be taken into account at all, it was still found that 42% of the main sites are worth more to us financially in their natural state.
People mainly exploit nature to derive financial benefits. Yet in almost half of the cases we studied, human-induced exploitation subtracted rather than increased economic value
The only sites where it was calculated that financial gains where higher when exploited, were those used to harvest high price commodity crops like sugar or cereal. However, in many sites currently suffering degradation caused by farming rubber, tea and cocoa, overall financial value would be higher if they had stayed as natural habitats. Additionally, the scientists note that even from the 24 main sites with extensive data, the results are conservative. Trying to equalise a natural area with financial gains is not easily done, yet data across all 62 sites shows that financial gains were typically delivered at a much higher levels by natural habitats.
Political leaders respond – a new statistical framework
The monetary worth of nature has also led decision makers worldwide to take action. On the 11th of March 2021 a new statistical framework to better account for biodiversity and ecosystems in national economic planning and policy decision-making was approved. This allows countries worldwide to use a common set of rules and methods to track changes in ecosystems and their services. The European Commission (EC) supported the United Nations (UN) in the development of this framework with contributions from scientists, statisticians and policymakers. The new framework goes beyond the commonly used statistic of gross domestic product (GDP) and ensures that natural capital accounts — the contributions of forests, oceans and other ecosystems — complements existing economic accounts.
To tackle the climate and biodiversity crises we have to transform our economic model. This new statistical framework moves beyond GDP and takes better account of biodiversity and ecosystems in national economic planning. It is a major development in changing the way we think about prosperity and wellbeing.
The adaption of the UN Framework by the EC is a timely one: in 2009 the EC launched the “Beyond GDP” initiative to develop and use social and environmental indicators and accounting to measure progress in a holistic way. Additionally, the European Green Deal calls for managing and integrating climate and environmental risks into the financial system, while the EU Biodiversity Strategy 2030 stresses the need to integrate biodiversity considerations better into public and business decision-making at all levels. The framework will allow for a substantial change in economic reporting.
EUROPARC believes that there are of course many more reasons to protect and restore our natural heritage, and indeed, we believe in the intrinsic worth of nature. Essential for human health, we need healthy ecosystems to survive. However we also know the realities of the world: Taking the financial value of natural areas into consideration would “make the economic case for conservation overwhelming.” EUROPARC welcomes the positive developments following the launch of the Green Deal and Biodiversity Strategy and we will continue to lobby and represent Protected Areas across Europe to ensure better outcomes for nature – and for people.