Dasgupta review: Climate report urges govts to embed nature into economic decision-making

Society needs to reevaluate the measure of economic success by embedding the natural environment into financial decision making in order reverse a rapid decline in biodiversity that poses extreme risk to livelihoods, an independent global review led by a British-Indian economist has concluded.

Led by Professor Partha Dasgupta, the review titled ‘The Economics of Biodiversity’, commissioned by the UK’s Treasury department, is a first-of-its-kind detailed framework of the relationship between biodiversity and economics that warns of the adverse impacts of societal systems on limited planetary resources.

“Nature needs to enter economic and finance decision-making in the same way buildings, machines, roads and skills do, the review states. “To do so ultimately requires changing our measures of economic success. Introducing natural capital into national accounting systems would be a critical step towards making inclusive wealth our measure of progress.”

The 600-page comprehensive report says that society needs to do better at embedding natural environment and biodiversity loss into the economic thought and decision-making, which isn’t the case at the moment.

It argues that nature provides a finite set of goods and service, but humanity is placing unsustainable demands on nature’s ecological services on a sustainable basis and hoping to reverse the damages through technological interventions. But the review says, “we cannot rely on technology alone: consumption and production patterns will need to be fundamentally restructured”.

Crucially, the review points to a “broader institutional failure”. “Many of our institutions have proved unfit to manage the externalities. Governments almost everywhere exacerbate the problem by paying people more to exploit Nature than to protect it, and to prioritise unsustainable economic activities,” the review states.

The review lays out three broad areas of solutions, including ensuring humanity’s demands on nature do not exceed its sustainable supply and adopting a different metrics for economic success to move towards an inclusive measure of wealth that accounts for the benefits from investing in natural assets. It also includes transforming institutions and systems to enable these changes and sustain them for future generations.