An international team of researchers, including from various European institutions, propose a new method for governments to calculate the benefits of protecting biodiversity for future generations, according to a study published in Science.
The current methods use cost-benefit analysis, in which the loss of animal and plant species and “systems” lost — such as filtering water or pollinating crops, for example — are converted into a monetary value. The aim is to make biodiversity loss more visible in political decision-making.
However, the authors believe these current methods are insufficient and have devised a new approach, which they believe would be easier to use in Treasury analysis underpinning future budget calculations.
This new method considers the increase in monetary value of biodiversity over time (same as human income increases), as well as the predicted loss in biodiversity, making it more of a scarce resource. This differs from current methods, which don’t consider changes over time. “Our study provides governments with a formula to estimate the future values of scarce ecosystem services that can be used in decision-making processes,” said Moritz Drupp, Professor of Sustainability Economics at the University of Hamburg and lead author of this study.
The team considered two factors in this value adjustment. First, income will rise, and people will be willing to pay more to conserve nature. Second, whatever “services” ecosystems provide, they’ll be worth more as resources become scarcer. “The fact that scarce goods become more expensive is a fundamental principle in economics, which applies here. And in view of current developments, unfortunately, we must expect the loss of biodiversity to continue,” said Professor Drupp.
“The monetary values for the environment that are currently used by policy makers in the appraisal of public investments and regulatory change mean that nature becomes relatively less valuable over time compared to other goods and services,” said Professor Ben Groom, from the University of Exeter. “Our work shows this is wrong. We propose an uplift in the values of ecosystems over time. This proposal could easily be deployed in the Treasury’s analysis that will underpin future Budget statements.”
“Take coral reefs as a specific example. These are expected to decline in area and, biodiversity as the climate changes, meaning that the remaining reefs will be much more valuable than today, and even more so as household incomes rise. This matters when we assess coral reef preservation with long-lasting effects,” added Dr Frank Venmans from the London School of Economics.
“The government is under considerable pressure from many sides for additional public investment. Ensuring that the protection of ecosystems is appraised in a way that is consistent with other public projects, including HS2 and other infrastructure spending, is critical. This is what our work aims to achieve,” concluded Professor Mark Freeman from the University of York.
Overall, the authors believe that political decisions can help prevent further loss of biodiversity, and it’s vital that governments are able to assess the consequences of their decisions today and in the future.
M. A. Drupp et al., Accounting for the increasing benefits from scarce ecosystems.Science383,1062-1064(2024).DOI:10.1126/science.adk2086