The Nature of economics: the Dasgupta report on biodiversity

Posted on April 8, 2021

The Dasgupta Report on biodiversity (1) was published at the beginning of February. It is an important document on a par with Nicholas Stern’s The Economics of Climate Change published in 2006. Not least because it has been commissioned and published by HM Treasury rather than by an environment ministry.  Its timing is significant coming in the year of both the international conference on Biodiversity scheduled for later this year in China, and the international conference on climate change (COP26) scheduled to be held in Glasgow in November and chaired by the UK Government.

Concerns around loss of biodiversity are not new. Rachel Carson’s Silent Spring drawing attention to the urgency of species loss was published in 1962, and although largely suppressed there at the time, Boris Komarov’s The destruction of nature in the Soviet Union was published in the West in 1978. Both in very different political contexts, raised the alarm at what was going on half a century or more ago. But biodiversity loss has not just continued apace since then but massively accelerated with increasingly alarming consequences. As one of the reports ‘headline messages’ puts it: ‘The devastating impacts of COVID19 and other emerging infectious diseases – of which land-use change and species exploitation are major drivers – could prove to be just the tip of the iceberg if we continue on our current path.’

Prof Dasgupta’s report is one that generates mixed feelings – at least for me.  On the one hand it is raising the alarm about the current crisis in an informed and scholarly way at a time when people are more attuned to hearing its messages than ever before. Its headline messages are clear ‘Our unsustainable engagement with Nature is endangering the prosperity of current and future generations’ or ‘Our economies livelihoods and well-being all depend on our most precious asset: Nature’ along with a number of other pointed statements. On the other it is framed in ways that many people will find hard to feel takes the debate forward in a very constructive way. Perhaps because it was written for an economics ministry by an economist, it adopts a depressingly economistic tone. Having acknowledged that nature is a precious asset which ‘provides us with spiritual fulfilment and opportunities for recreation and recuperation’ it repeatedly says ‘We are all asset managers’ and refers to the planet as ‘.. a sink for our waste products such as carbon dioxide, plastics and other forms of waste including pollution.’

Comparisons with the Stern Report on climate change are instructive. The Stern Report included a series of policy prescriptions flowing from its analysis. But this Biodiversity Review seems rather to set out to act as an (important) intervention in the international debate at a point with COP26 in the offing, a new more science and climate-friendly government has come to power in the United States, and the ravages of COVID and their origins are in the forefront of everybody’s minds, rather than in any sense setting out an agenda for action by the British Government that commissioned it. At 500 odd pages plus another 100 of references and annexes, a striking aspect of this document is how little space is given to recommendations flowing from its analysis. This is concerning when the UK has been failing to achieve its own biodiversity targets. If the Review’s thinking were to be seriously followed through into the details of regulation, legislation, taxation policy, planning, government infrastructure projects, and the like, some very worthwhile change could be achieved. There is in fact a section, chapter 21, ‘Options for Change’ that does, fairly briefly considering the length of the report, identify a set of policy proposals, though nowhere are they highlighted or pulled out into an executive summary or action plan.  These range from better land-use and marine spatial planning, making payments to farmers to avoid habitat conversion, more sustainable agricultural production systems, expanded environmental taxation, payment to countries for maintaining tropical forests, a global risk-pool to provide insurance against environmental disasters, greater access to green space for people in urban areas, and environmental education and an understanding of the natural world for all school-age children. There is also a fair amount about the adoption of ‘natural capital’ accounting for business and financial institutions and governmental and international agencies, though ironically considering one of its headline messages is ‘At the heart of the problem lies deep-rooted widespread institutional failure’ there are no recommendations on how to tackle this. Indeed, with the exception of this last set of proposals, there is an odd sense that they don’t really need the economic architecture of such a closely argued report to be considered (and hopefully adopted) as policy recommendations. In many cases their connection to economics at all is somewhat tenuous.

While it is fair to say that the Review doesn’t advocate that we continue to be in ‘business as usual’ mode, it does see nature as another good that can be valued, traded, and traded-off. Assigning a value to nature is at one level a ‘good thing’. Giving it no value means that it isn’t cherished, but who assigns the value? who sets the price? In a pretty excoriating series of tweets on the day of publication George Monbiot damned the report as being ‘naive about power’ and ‘morally wrong, intellectually vacuous, and counter-productive’(2).  Diana Coyle and Matthew Agarwala in a more supportive critique of the Report (3) comment that valuing biodiversity is ‘no mere matter of appreciating, for their intrinsic value, the multitude of different species on earth. Our standard of living fundamentally depends on it.’  and go on to argue that standard economic thinking has treated nature as separate from the economy whereas this review ‘demonstrates that the economy sits wholly within the natural world.’ Or does this Review actually make the case for the natural world sitting wholly within the economy? An entirely different proposition.

How this important document is received and acted upon will depend a lot on who is looking at it, because in the right hands it has the potential to be radical, but equally it runs the risk of winding up as elaborate greenwash. For the sake of the planet let’s hope that it spurs radical action in Finance Ministries, corporations and civil society institutions across the world.

1.       The Economics of Biodiversity; the Dasgupta review HM Treasury 2021

2.       https://twitter.com/GeorgeMonbiot/status/1356314862935224321

3.       Diana Coyle and Matthew Agarwala. Why the economy needs biodiversity Green Alliance blog. 3 February 2021

This article first appeared in the March/April edition of Town and Country Planning.

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