What price should be put on a rabble of butterflies or a swampy marshland teeming with life? Nature was long discussed in terms of its intrinsic value, cherished by poets rather than accountants. But economists and conservationists have realised that leaving nature out of national accounts has hastened its degradation.

A new movement is afoot to put a price on ‘ecosystem services’. Put simply, eco-system services are the benefits of nature, from carbon sinks to fertile soil and natural flood defences.

The value of these benefits often exceeds the rewards that might accrue if they were to be turned over to private profit. For example, a study of Indonesia’s Leuser National Park, a mountainous area of northern Sumatra, showed that the benefits of continued deforestation were less than those of conserving the forest. 

Chopping the trees down would bring a return of $7 billion (€5bn) by 2030, but leaving them standing would yield a return of approaching $9.5bn (€6.9bn).  According to the study, this extra $2.5bn (€1.9bn) would be most likely to benefit local people, who would be better protected against floods and could gain rewards from more tourism and higher agricultural production than would occur if the trees were lost.

This example is cited in a study on ‘the economics of ecosystems and biodiversity’ (TEEB),  commissioned by the European Commission and EU member states. Led by Pavan Sukhdev, a former Deutsche Bank economist, the study group will publish its final report in November.

Interim reports have married a concern for poverty and the environment with the theory of economics and the language of business – for instance, the TEEB team says that “investing in the earth’s ecological infrastructure” has the potential to offer “an excellent rate of return”.

The TEEB group estimates that a well-protected network of conservation sites covering 15% of the land and 30% of marine areas would cost $45bn (€33bn), but the benefits accrued could be around $5 trillion (€3.6 trillion). For example, catching fewer fish (and preserving stocks) would increase the value of the catch by $50bn and create one million jobs.

The benefits of preserving nature are captured in other ways. Biodiversity loss would jeopardise Millennium Development Goals, especially those related to eradicating hunger and extreme poverty.

Those European officials and politicians who commissioned the study were clearly inspired by the report by British economist Nicholas Stern on the economics of climate change. By putting a price on nature and its degradation, they hope to push this issue higher up the political agenda.

But before the final TEEB report is published at the end of the year, campaigners are making a push for biodiversity and sustainable use of resources to be part of the EU’s new economic strategy. Europe 2020 is to be a ten-year plan aimed at boosting jobs and growth in a ‘smart’ and ‘sustainable’ way. The first draft of the plan will be published on 3 March for EU leaders to discuss at their spring summit on 25-26 March.

But although the Commission has said that “loss of biodiversity and pollution should not be forgotten”, activists are already complaining that the Commission’s response to its consultation betrays a focus with ‘narrow’ competitiveness concerns.  In an open letter to José Manuel Barroso, the Commission president, and national leaders, the European Environmental Bureau urged governments and the Commission to focus on resource efficiency in its broadest sense.

“We expect EU leaders to single out a sustainability roadmap with clear targets, actions and time-frames to move the economy in an eco-efficient direction,” said Michael Karlsson, president of the EEB.

According to the EEB, if every person on the planet consumed as many resources as the average EU citizen, two-and-a-half earths would be needed. The group is calling for the EU to promise to cut its ecological footprint in half within 20 years.

The EU’s Europe 2020 strategy could be the first opportunity to test the new economics of biodiversity and find out whether the EU’s political leaders have adapted to a world where nature’s value is counted in euros and cents.

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