Biodiversity Nepal
For the Future Generation

The overlooked payment for ecosystem services

People go on getting richer, and the planet pays a mounting price. There’s a better way to balance nature’s accounts.

LONDON, 24 June, 2020 – It may take a while to catch on, but one day the financial pages of the daily newspaper could be quoting a new register of national wealth: called gross ecosystem product, this way of balancing nature’s accounts makes clear how much we really depend on the Earth.

And it would be a real-world indicator of prosperity you could have confidence in: a measure in cash terms of the health of the forests, rivers, lakes and wildlife of both nations and regions and – more precisely – of the benefits heedless humans take for granted.

These include the insect pollination of crops; the control of insect pests by birds and bats; the supply of fresh, safe water from mountain streams, rivers, springs and lakes; the management of waste by scavengers and microbes; the recycling of nutrients; and all the myriad services provided by plants, animals and topography. This is sometimes called “natural capital.”

The measure has already formally been tested in one province in China and matched with the more familiar indicator: Gross Domestic Product, or GDP.

Flying blind

Chinese scientists report in the Proceedings of the National Academy of Sciences that in the year 2000, the gross ecosystem product or GEP of Qinghai province was greater than its GDP.

By 2015, after phenomenal economic growth, it was still three-fourths the size of its GDP. And the form this natural wealth took? Mostly water supplies to other crowded regions: Qinghai is where the Mekong, the Yangtze and the Yellow Rivers rise.

“We’re basically flying blind when it comes to knowing where and how much nature to protect,” said Gretchen Daily, an environmental scientist at Stanford’s School of Humanities and Sciences in California, and one of the report’s authors.

“GEP tracks the vital contributions of nature to society, informs investments in securing them and helps evaluate the performance of leaders and policies.”

And her British co-author, Ian Bateman, an economist at the University of Exeter, said: “The global economy as conventionally measured by GDP more than doubled between 1990 and 2015. However, at the same time our stocks of ‘ecosystem assets’ – such as forests, grasslands, wetlands, fertile soils and biodiversity – have come under increasing pressure.”

He continued: “These things are obviously valuable in many ways – including to human wellbeing. However, in this study we examine the benefits they bring us measured in a way that governments and business can understand.”

Naturalists, conservationists and economists have repeatedly argued that it makes better economic sense to conserve nature rather than to exploit it: untouched natural forest or grassland contributes more to everybody’s wealth than any clear-felling project or conversion to cattle-grazing.

“We were able to place a value on important ecosystem services, especially water supply, that Qinghai currently exports to other provinces but receives no credit for in the GDP calculation”

Scientists and economists have again and again tried to calculate the cash value to humankind of nature’s goods and services, and to steer development in a sustainable fashion.

They have repeatedly warned that global heating driven by profligate use of fossil fuels is almost certain to hit the pockets of the poorest most cruelly.

And they have warned that uncontrolled exploitation of once untouched natural forests, mangrove estuaries, grasslands, wetlands and coral reefs that precipitates mass extinction of species is certain to impoverish billions in the long run.

Direct test

But to persuade governments that natural capital represents an investment with measurable returns, economists need a standard global measure. GEP could be it.

The measure was tested directly in what is sometimes called the “water tower” of Asia. The logic is that if the people of that region care for their natural habitat, and people downstream benefit directly from that care, then those downstream should also contribute to the costs of care.

“Qinghai is rich in natural capital but its GDP alone does not reflect that value”, said the study’s lead author, Zhiyun Ouyang, of the Chinese Academy of Sciences.

“Using this new metric we were able to place a value on important ecosystem services, especially water supply, that Qinghai currently exports to other provinces but receives no credit for in the GDP calculation.” – Climate News Network

Written by: Tim Radford for Climate News Network.

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