Researchers advocate for governments to adopt a novel approach to calculating the benefits of conserving biodiversity and nature for future generations. This method, proposed in the journal Science, aims to integrate the monetary value of ecosystem services, such as air and water filtration, crop pollination, and recreational value, into cost-benefit analyses for public infrastructure projects. The objective is to enhance the visibility of biodiversity loss and the benefits of nature conservation in political decision-making processes.
Current methodologies for valuing ecosystem services are criticised for their limitations in capturing how these values evolve. In contrast, the new approach considers the projected increase in monetary value as human incomes rise and the expected decline in biodiversity, treating nature as a progressively scarce resource. This economic principle acknowledges that people are willing to invest more in conserving nature as incomes grow. Additionally, it recognises that as ecosystem services become scarcer, their monetary value increases, a phenomenon fundamental to economics.
Professor Moritz Drupp, leading the study on sustainability economics at the University of Hamburg, emphasises that their formula provides governments with a tool to estimate future values of essential ecosystem services crucial for decision-making. The research underscores two critical factors influencing these adjustments: the annual rise in global income adjusted for inflation and the diminishing availability of biodiversity resources. These considerations argue for setting significantly higher present values of ecosystem services in contemporary cost-benefit analyses, potentially exceeding 130 per cent when accounting solely for income growth and over 180 per cent when also factoring in the impact on endangered species listed in the Red List Index.
The research team includes notable UK-based academics like Professor Mark Freeman from the University of York, Dr Frank Venmans from the LSE, and Professor Ben Groom from the University of Exeter. They highlight that current environmental valuation methods often undervalue nature over time compared to other goods and services. Their proposed uplift in ecosystem values aims to rectify this oversight and suggests its incorporation into future Treasury analyses supporting budgetary decisions.
Dr Venmans provides a specific example with coral reefs, predicting their decline due to climate change and emphasising the increased value of remaining reefs amidst rising household incomes. This scenario underscores the urgency for governments to reassess the long-term benefits of preserving ecosystems with enduring impacts. Professor Freeman underscores the urgency for governments to align the appraisal of ecosystem protection with other significant public investments, ensuring consistency across projects like HS2 and broader infrastructure spending.
The researchers stress that political decisions can mitigate biodiversity loss, underscoring the necessity for governments to comprehensively evaluate the ramifications of their policies today and in the future. Their work seeks to equip policymakers with robust tools to integrate the economic value of ecosystem services into decision-making frameworks, fostering sustainable development practices that safeguard natural resources for future generations. This comprehensive evaluation is crucial for making informed and responsible decisions.
More information: Moritz Drupp et al, Accounting for the increasing benefits from scarce ecosystems, Science. DOI: 10.1126/science.adk2086
Journal information: Science Provided by University of Exeter
