A Review of ‘The Economics of Biodiversity: The Dasgupta Review’

“They paved paradise and put up a parking lot” is the first line from a very prescient song called “Big Yellow Taxi” from 1970 by Joni Mitchell. Back then, biodiversity loss and nature depletion were a fraction of what they are now. Lately, we have been hearing a lot more about the climate crisis in the media, and we will be hearing even more in the lead up to COP26 this November.

What has been less well understood until recently, is that there is a related crisis of biodiversity loss, from over-exploitation of the natural world. The two crises are linked and will continue to impact each other. Essentially, without enough nature recovery, humanity will not be able to avert the climate crisis. The biosphere is the “natural capital” or “asset”. It holds and enables all the means to sustain life in a delicate web of interactions among and between life forms and the physical world. These interactions produce ecosystem services, which are the “dividend”. These ecosystem services are powered by the sun, provided for free, and are essential for life. They will continue indefinitely, self-perpetuating, if the asset is not eroded. Good levels of biodiversity lead to strong, resilient ecosystem services.

Sounds wonderful, doesn’t it? It is! The trouble is that humanity, especially in the last half century, has been drawing down the capital, weakening ecosystem services, and leaving us more and more exposed to climate disaster and disease pandemics.

Our current way of life is not sustainable; we would need 1.6 Earths to continue at the current consumption rates. This simple fact has been largely ignored by most main stream economists (and many politicians) until recently. Hopefully a very recent Treasury commissioned review, ‘The Economics of Biodiversity’ by Sir Partha Dasgupta, will be the harbinger of dramatic change in economic policies in a similar way to ‘The Stern Review’ of 2006 (also Treasury commissioned). The latter brought political changes that led to the UK’s Climate Change Act of 2008, setting carbon reduction targets in law; this was a world first and something other countries have since emulated.

The full version of ‘The Economics of Biodiversity’ is very technical in many parts, with many highly detailed recommendations, but Sir Partha has summarised the key take-away messages:

  1. Our economies, livelihoods and well-being all depend on our most precious asset: Nature.

  2. We have collectively failed to engage with Nature sustainably, to the extent that our demands far exceed its capacity to supply us with the goods and services we rely on.

  3. Our unsustainable engagement with Nature is endangering the prosperity of current and future generations.

  4. At the heart of the problem lies deep-rooted and widespread institutional failure.