The variety of life on Earth, its biological diversity is commonly referred to as biodiversity. The number of species of plants, animals, and microorganisms, the enormous diversity of genes in these species, the different ecosystems on the planet, such as deserts, rainforests and coral reefs are all part of a biologically diverse Earth. Appropriate conservation and sustainable development strategies attempt to recognize this as being integral to any approach to preserving biodiversity. Almost all cultures have their roots in our biological diversity in some way or form. For example, at least 40% of the world’s economy and 80% of the needs of the poor are derived from biological resources. Declining biodiversity is therefore a concern for many reasons.
Biodiversity boosts ecosystem productivity where each species, no matter how small, contributes to functionality. A healthy biodiversity provides a number of natural services for everyone: 1) Ecosystem services, such as protection of water resources, soil formation and protection, nutrient storage and recycling, pollution breakdown and absorption, contribution to climate stability, maintenance of ecosystems, and recovery from unpredictable events. 2) Biological resources, such as food, medicinal resources and pharmaceutical drugs, wood products, ornamental plants, breeding stocks, population reservoirs, future resources, diversity in genes, species and ecosystems. 3) Social benefits, such as, research, education and monitoring, recreation and tourism, and cultural values.
Biodiversity boosts ecosystem productivity where each species, no matter how small, contributes to functionality. A healthy biodiversity provides a number of natural services for everyone: 1) Ecosystem services, such as protection of water resources, soil formation and protection, nutrient storage and recycling, pollution breakdown and absorption, contribution to climate stability, maintenance of ecosystems, and recovery from unpredictable events. 2) Biological resources, such as food, medicinal resources and pharmaceutical drugs, wood products, ornamental plants, breeding stocks, population reservoirs, future resources, diversity in genes, species and ecosystems. 3) Social benefits, such as, research, education and monitoring, recreation and tourism, and cultural values.
Biodiversity is also a solution to global climate change. Nature can provide more than 30 percent of the solution to climate change by holding global warming below 2 degrees Celsius — and biodiversity is an essential part of the picture (Shaw 2018). “For a relatively small investment, high-biodiversity forests and other ecosystems can be conserved and restored as a powerful means to rein in climate change while also helping communities cope with associated storms, flooding and other impacts,” Langrand said (Critical Ecosystem Partnership Fund).
Economically, retaining biodiversity is also a sound investment. For example, the food, commercial forestry and ecotourism industries could lose US$ 338 billion per year if the loss of biodiversity continues at its current pace (The Business of Biodiversity). And in terms of future investment, global sustainable business opportunities from investing in natural resources could be worth US$ 2 to 6 trillion by 2050 (The Economics of Ecosystems and Biodiversity (TEEB) initiative). This does not take into account the current dependency of millions of people who depend on nature for their livelihoods. Unfortunately, those who often are most dependent on nature turn to these high-biodiverse areas to survive.
Current economic systems have had very limited success in decoupling socioeconomic progress from impacts on renewable forms of natural capital. In principle, we should reap the harvests of renewable natural capital indefinitely. However, there are reasons for concern about exhaustible natural capital. This is partly because exhaustible natural capital is often valued at market prices, though some argue whether we should even be putting a price on nature. Market prices of resources roughly reflect scarcity, even if they often do not fully reflect all social costs (such as pollution). Increasing prices provide stronger incentives for mineral reuse and recycling, substitution, demand reductions and/or supply increases by greater exploration and production.
In contrast, such price signals are often absent or significantly distorted for renewable natural capital. The lack of appropriate prices is related to a number of challenges in the measurement, valuation and management of such natural capital. And yet, accounting of natural capital is argued to be essential for sustainable development (UNEP, 2011, World Bank, 2011). While pricing is not the only answer – as demonstrated in fisheries and forestry – it is perhaps unsurprising that priced exhaustible natural resources are not currently at risk of exhaustion, while unpriced renewable resources are often being depleted at rates that exceed their regenerative capacity.
Quantifying the wealth derived from natural capital can help improve natural resource management, though again this may not necessarily be the best way to conserve biodiversity. Rather, this "new conservation" mantra of placing value on biodiversity suggests that there must be some value to people and economies if a species or habitat is to be saved. Others might argue that these species and habitats need to be conserved irrespective of capitalistic value.
With incomplete accounting of natural capital stocks and flows at inaccurate prices, increasing monetary values of natural capital is not necessarily an indicator of sustainability. If accounting were comprehensive and prices accurate, decreases in measured wealth would serve as reliable indicator of a lack of sustainability in a given national economy. The existence of thresholds and system limits implies that another governance process is required to complement wealth accounting. Such a process would ideally incorporate the best science and arise through a legitimate, political consensus-building process, and provide guidance on the specification of the levels of natural capital beyond which further depletion is agreed to be inadvisable.
Resources
The wealth of nature Increasing national wealth and reducing risk by measuring and managing natural capital; Global Issues: Social, Political, Economic and Environmental Issues
Quantifying the biodiversity value of tropical primary, secondary, and plantation forests
Biodiversity offsetting in the United States
Biodiversity Offsets: IUCN
Biodiversity Offsets: Effective Design and Implementation
Biodiversity Offsets Scheme
Economically, retaining biodiversity is also a sound investment. For example, the food, commercial forestry and ecotourism industries could lose US$ 338 billion per year if the loss of biodiversity continues at its current pace (The Business of Biodiversity). And in terms of future investment, global sustainable business opportunities from investing in natural resources could be worth US$ 2 to 6 trillion by 2050 (The Economics of Ecosystems and Biodiversity (TEEB) initiative). This does not take into account the current dependency of millions of people who depend on nature for their livelihoods. Unfortunately, those who often are most dependent on nature turn to these high-biodiverse areas to survive.
Current economic systems have had very limited success in decoupling socioeconomic progress from impacts on renewable forms of natural capital. In principle, we should reap the harvests of renewable natural capital indefinitely. However, there are reasons for concern about exhaustible natural capital. This is partly because exhaustible natural capital is often valued at market prices, though some argue whether we should even be putting a price on nature. Market prices of resources roughly reflect scarcity, even if they often do not fully reflect all social costs (such as pollution). Increasing prices provide stronger incentives for mineral reuse and recycling, substitution, demand reductions and/or supply increases by greater exploration and production.
In contrast, such price signals are often absent or significantly distorted for renewable natural capital. The lack of appropriate prices is related to a number of challenges in the measurement, valuation and management of such natural capital. And yet, accounting of natural capital is argued to be essential for sustainable development (UNEP, 2011, World Bank, 2011). While pricing is not the only answer – as demonstrated in fisheries and forestry – it is perhaps unsurprising that priced exhaustible natural resources are not currently at risk of exhaustion, while unpriced renewable resources are often being depleted at rates that exceed their regenerative capacity.
Quantifying the wealth derived from natural capital can help improve natural resource management, though again this may not necessarily be the best way to conserve biodiversity. Rather, this "new conservation" mantra of placing value on biodiversity suggests that there must be some value to people and economies if a species or habitat is to be saved. Others might argue that these species and habitats need to be conserved irrespective of capitalistic value.
With incomplete accounting of natural capital stocks and flows at inaccurate prices, increasing monetary values of natural capital is not necessarily an indicator of sustainability. If accounting were comprehensive and prices accurate, decreases in measured wealth would serve as reliable indicator of a lack of sustainability in a given national economy. The existence of thresholds and system limits implies that another governance process is required to complement wealth accounting. Such a process would ideally incorporate the best science and arise through a legitimate, political consensus-building process, and provide guidance on the specification of the levels of natural capital beyond which further depletion is agreed to be inadvisable.
Resources
The wealth of nature Increasing national wealth and reducing risk by measuring and managing natural capital; Global Issues: Social, Political, Economic and Environmental Issues
Quantifying the biodiversity value of tropical primary, secondary, and plantation forests
Biodiversity offsetting in the United States
Biodiversity Offsets: IUCN
Biodiversity Offsets: Effective Design and Implementation
Biodiversity Offsets Scheme