Masthead graphic based on a painting by Gudrun Thriemer.

Friday, November 07, 2008

The economics of ecosystems and biodiversity,

[This Interim Report by the European Commission Directorate-General Joint Research Centre Institute for Environment and Sustainability addresses the failure of markets to self-regulate because they do not account for the impact of economic activity on biodiversity. -jlt]

This document aims to promote a better understanding of the true economic value of ecosystem services and to offer economic tools that take proper account of this value. The Economics of Ecosystems and Biodiversity (TEEB) is split in two phases and this interim report summarises the results of Phase I. It demonstrates the huge significance of ecosystems and biodiversity and the threats to human welfare if no action is taken to reverse current damage and losses. Phase II will expand on this and show how to use this knowledge to design the right tools and policies.

It is highlighted that nature provides human society with a diversity of benefits such as food, fibres, clean water, carbon capture and many more. Though well-being is totally dependent upon the continued flow of these “ecosystem services”, they are predominantly public goods with no markets and no prices, so they are rarely detected by the current economic compass. As a result, biodiversity is declining, ecosystems are being continuously degraded and we, in turn, are suffering the consequences. However, society’s defective economic compass can be repaired with appropriate economics applied to the right information. This will allow existing policies to be improved, new policies to be formed, and new markets to be created, all of which is needed to enhance human well-being and restore the planet’s health.

Read the full document here =>
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