Our debt to nature: USD 20 trillion a year and rising
A new study puts the cost of using the environment at around USD 20 trillion a year, up substantially on the last estimate from 1997, says Leony Aurora
The world’s gross domestic product (GDP) expanded 2.3 percent last year to USD 71.7 trillion. Nearly one-third of this figure rode free on the back of the environment, totally unaccounted for and with consequences that accountants can understand: an increasing debt with increasing problems.
‘We have to start building these calculations into our accounting and policy frameworks if we really want to build a sustainable future and avoid disaster’, said Robert Costanza, Chair of Public Policy at the Australian National University’s Crawford School of Public Policy. ‘Continuing to emphasize growth and GDP as a solution to all of our problems is really a misplaced policy. It ignores these substantial external costs that really do affect human wellbeing’.
Speaking about his research at the 6th Annual International Ecosystem Services Partnership conference in Bali, Indonesia, he revealed there was a substantial increase in the cost to the environment from human activities. The new estimates are mostly higher figures from an earlier study carried out in 1997, owing to better data and added ecosystems, such as agriculture and urban landscapes.
‘Estimates of the loss of ecosystem services show the magnitude of the economic damage that human consumption and activities are causing with non-sustainable use’, said Rudolf de Groot, associate professor at Wageningen University and one of the authors of the 1997 study, The value of the world’s ecosystem services and natural capital. ‘We are now building a natural capital debt that’s substantial’.
That debt will have to be paid by someone, presumably by the current generation’s children and grandchildren, who will have to try and repair essential ecosystems damaged by our commercial activities.
‘What we really want are businesses that make social profit, not just financial profit‘, added Costanza.
Puma, the sport and lifestyle company, became a pioneer when it published its first complete environmental profit-and-loss statement across its entire supply chain. Researchers like Costanza think more companies need to follow suit.
GDP has often been criticized as not representing a complete picture of what societies need to thrive. Many other studies have highlighted the importance to move beyond GDP and the significant environmental loss caused by human activities. A 2012 study led by Ida Kubiszewski and Costanza estimated that economic welfare, measured by the Genuine Progress Indicator, has been flat or decreasing since 1978, despite more than three-fold increase of GDP since the 1950s. The study looked into 17 countries that represented 53% of the global population and 59% of global GDP.
A study conducted by Trucost, commissioned by The Economics of Ecosystem and Biodiversity, has estimated that the total of the top 100 environmental costs from businesses reached USD 4.7 trillion. Greenhouse gases from coal-fired power generation in Eastern Asia contributed the largest environmental impact followed by land use linked to cattle farming in South America, according to the study.
Making Ecosystem Services Count is the theme of this year’s Ecosystem Services Partnership conference, 26–30 August, where more than 350 experts on ecosystem services are gathered. Their research results will help policymakers, businesses and communities better manage the planet’s remaining natural resources.
Edited by Robert Finlayson
The conference is supported by the CGIAR Research Program on Forests, Trees and Agroforestry‘s component on landscape management for environmental services, biodiversity conservation and livelihoods