Wednesday, June 11, 2008

European Community report about economics of biodiversity

"Not all that is very useful commands high value (water, for example) and not everything that has a high value is very useful (such as a diamond)." Preface, The Economics of Ecosystems and Biodiversity: an Interim Report

Environmental Valuation & Cost-Benefit News has alerted us to a new resource. At the European Environment Ministers Meeting's "Potsdam Initiative--Biological Biodiversity 2010", " the German government proposed a study of the economic significance of the global loss of biological diversity, including the costs of the loss of biodiversity and the failure to take protective measures versus the costs of effective conservation. Endorsed by G8+5 leaders in June 2007, the European Community commissioned the study and has now issued an interim report, The Economics of Ecosystems and Biodiversity. The report's comments include:
  • poverty and the loss of ecosystems and biodiversity are inextricably intertwined, with the poor the immediate beneficiaries of many services of ecosystems and biodiversity, and the livelihoods most affected being subsistence farming, animal husbandry, fishing and informal forestry

  • in most of the valuation studies examined, discount rates used were in the range 3-5%
    and higher, noting that a 4% discount rate means that we value a natural service to our own grandchildren (50 years hence) at one-seventh the utility we derive from it, a difficult
    ethical standpoint to defend

  • every aspect of the economics of ecosystems and biodiversity to be examined by the study must be sharply focused on the end-user – be it the policymaker, the local administrator, the corporation or the citizen.

The next phase of the study will aim at creating a science and economics framework to help frame valuation exercises for most of Earth’s ecosystems, further evaluating and publishing recommended valuation methodology, engaging all key end-users of the evaluation work to ensure that the study's outputs are as focused as possible on their needs, and further evaluating and publishing a policy toolkit for policy makers and administrators that supports policy reform and environmental impact assessment with the help of sound economics.

You can find the report online.

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