Saturday, November 07, 2009

Costing the Earth: Investing in Protecting the Planet (and Ourselves)

CNN covers the emerging field of ecosystem services -- and how to properly compensate countries, communities, and landowners for the services they provide to societies.

From coral reefs to forests, natural capital is under direct threat, and the combined pressures of climate change, ocean acidification, urbanization, pollution and logging are pushing the natural world to the brink.

These ecosystems are on the point of collapse," said (Ecological economist Pavan Sukhdev, the head of the Cambridge University-based group The Economics of Ecosystems and Biodiversity)...

"We need to recognize the true value of these resources as sources of clean water, as warehouses of biodiversity, as locations where over a billion people earn their livelihoods.
"They are irreplaceable. We should not only be recognizing them as high-capital assets, we should be paying someone to look after them.

"We are at risk of seriously damaging the global economy if we do not."

Putting a price on nature
Apart from a moral obligation to look after our environment, Sukdev believes that even in simple cost benefit terms conservation is good sense and investing $45 billion could secure "nature-based services" worth $4.5 trillion to $5.2 trillion annually.

Sukhdev is a senior banker at Deutsche Bank, currently on secondment, and the research reflects his understanding of global money markets.

The returns he outlines are extremely impressive: "investing" in coral reefs carries a return of seven percent, while rivers offer 27 per cent, tropical forests 50 percent, mangroves 40 percent, and grasslands a huge 79 percent return.

He cites a specific example of this in Vietnam, where planting mangroves along the coast cost $1.1 million but saved $7.3 million annually in dyke maintenance.

At this point, we have a pretty damn good idea how valuable nature's services are.  The challenge is devising smart and effective systems for paying people -- and communities and countries -- to keep these services intact. As the REDD debate demonstrates, it ain't gonna be easy.  It is, however, essential if we are to sustain both human well being and that of the biosphere.

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