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Dec 9, 2009

Economics of Ecology

Ecology is often said to be detrimental to our modern economies. Fighting to protect biodiversity, or to tackle global warming, should apparently not be priorities, because it would have a negative impact on growth. Nature recently featured an interesting reply to these views, in particular through an interview with Pavan Sukhdev, who leads a study on The Economics of Ecosystems and Biodiversity, (TEEB study).

One of the main arguments is that GDP (Gross Domestic Product) does not account for factors such as well-being and education levels, or use of natural resources, pollution levels, etc.

A striking example of this limitation is given at the start of the interview. A costly divorce involving an expensive lawyer, or a car crash resulting in repairs and medical bills, both correspond to an increase in GDP, but are not associated with any improvement of well-being.
Progress is not limited to GDP growth.

Similarly, a protected patch of forest has a number of benefits, most of these without any measured commercial value, such as pure air, natural habitat for animal species, formation of soil, potential for discovery of new medical cures, etc.

Obviously, putting a price on everything is not, in itself, a solution, (and poor estimates may lead to damaging decisions), but the recent actions on CO2 emissions show that "you cannot manage what you do not measure" (as Pavan Sukhdev puts it).

The TEEB report also highlights the need for a long-term view on these issues. Marine Protected Areas can, for instance, with short-term local costs for fishermen, if a no take zone is implemented. However, once fish populations have recovered, increasing catches have been observed: almost 75% of the US haddock catch are taken within 5 km of a fishery closed area, off the New England Coast (Fogarty and Botsford, 2007).

The report has a lot more content, and is worth reading, but as discussions start in Copenhagen, keeping at least these few facts in mind would do no harm.

For more details :
  • Nature article, and interview with Pavan Sukhdev..

  • "TEEB for Policy Makers report", (available on the project website).

  • Newsweek article.

  • M.J. Fogarty, L.W. Botsford, "Population connectivity and spatial management of marine fisheries". Oceanography 20(3):112-123, 2007, (available online).