Who cares about Wall Street financial crash
No CommentsAs much as I hate to think of the environment as something at our service instead of being precious for its intrinsic value, I have to admit I am glad when economists come up with calculations showing that environment conservation is even convenient from a purely economical point of view. The whole idea is that human well-being is dependent upon ecosystem services which are provided by nature for free, and that I have discussed already in a previous post. There have been several reports pointing out the economical costs of biodiversity loss, and although most of them are quite alarming, after a couple of years they all prove to have underestimated the effects.
One example is the famous Stern Review on the Economics of Climate Change that came out in 2006, whose main statement was that a policy of inaction would cost impressively more than if immediate action were taken. The calculations made by the Stern review were criticized by several economists as overstating damages, and therefore useless. However, it turned out that the prediction made, which were based on the too optimistic IPCC 2001 predictions of global climate change, have underestimated considerably the costs for non-conservation policies, already after about only a couple of years.
The EU commission for the environment has started a similar study in June 2007, which is called “The Economics of Ecosystems & Biodiversity (TEEB)’ to assess the costs due to loss of ecosystem services. The results of the first phase of this study was released last spring, and calculates that forest decline could be costing about 7% of global gross domestic product (GDP). While waiting for the second phase to examine costs from lost of other natural systems, we can play with the numbers at hand. According to Pavan Sukhdev, leader of the study, the cost of natural decline is much greater than the latest lost of financial markets. He declares to BBC that “…whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today’s rate we are losing natural capital at least between $2-$5 trillion every year.”
How ironic, while we are all extremely worried about the financial crisis, and wondering whether we can afford to invest in renewable sources of energy, or conservation programs.
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