It was noted earlier that ecosystems provide many services to us, for free.
Although some dislike the thought of trying to put an economic value on biodiversity (some things are just priceless), there have been attempts to do so in order for people to understand the magnitude of the issue: how important the environment is to humanity and what costs and benefits there can be in doing (or not doing) something.
The Economics of Ecosystems and Biodiversity (TEEB) is an organization — backed by the UN and various European governments — attempting to compile, build and make a compelling economics case for the conservation of ecosystems and biodiversity.
In a recent report, The Economics of Ecosystems and Biodiversity for National and International Policy Makers 2009, TEEB provided the following example of sectors dependent on genetic resources:
|Sector||Size of Market||Comment|
|Pharmaceutical||US$ 640 bn. (2006)||25-50% derived from genetic resources|
|Biotechnology||US$ 70 bn. (2006) from public companies alone||Many products derived from genetic resources (enzymes, microorganisms)|
|Agricultural seeds||US$ 30 bn. (2006)||All derived from genetic resources|
|Personal care, Botanical and food & Beverage industries||US$ 22 bn. (2006) for herbal supplements |
US$ 12 bn. (2006) for personal care
US$ 31 bn. (2006) for food products
|Some products derived from genetic resources. represents ‘natural’ component of the market.|
In addition, it is estimated that implementing REDD (Reducing Emissions from Deforestation and Forest Degradation) could help
- Halve deforestation by 2030, and
- Cut emissions by 1.5 Gt of CO2 per year.
From a cost perspective (p.18), it is estimated that
- It would cost from US$ 17.2 – 33 billion per year
- The estimated benefit in reduced climate change is US$ 3.2 trillion
- The above would be a good return on the initial investment. By contrast, waiting 10 more years could reduce the net benefit of halving deforestation by US$ 500 billion.
The BBC notes that biodiversity is fundamental to economics. For example,
- The G8 nations, together with 5 major emerging economies — China, India, South Africa, Brazil, Mexico — use almost three-quarters of the Earth’s biocapacity
- An estimated 40% of world trade is based on biological products or processes.
Despite these free benefits, it has long been recognized that we tend to ignore or underestimate the value of those services. So much so that economic measures such as GDP often ignores environmental costs.
The economic benefits of protecting the environment are well-understood, even if seemingly rarely practiced:
It has perhaps taken about a decade or so — and a severe enough global financial crisis that has hit the heart of this way of thinking — to change this mentality (in which time, more greenhouse gases have been emitted — inefficiently).
Economists talk of the price signal that is fundamental to capitalism; the ability for prices to indicate when a resource is becoming scarcer. At such a time, markets mobilize automatically to address this by looking for ways to bring down costs. As a result, resources are supposedly infinite. For example, if energy costs go up, businesses will look for a way to minimize such costs for themselves, and it is in such a time that alternatives come about and/or existing resources last longer because they are used more efficiently. should therefore be averted.
However, it has long been argued that prices don’t truly reflect the full cost of things, so either the signal is incorrect, or comes too late. The price signal also implies the poorest often pay the heaviest costs. For example, commercially over-fishing a region may mean fish from that area becomes harder to catch and more expensive, possibly allowing that ecosystem time to recover (though that is not guaranteed, either). However, while commercial entities can exploit resources elsewhere, local fishermen will go out of business and the poorer will likely go hungry (as also detailed on this site’s section on biodiversity). This then has an impact on various local social, political and economic issues.
In addition to that, other related measurements, such as GNP are therefore flawed, and even reward unproductive or inefficient behavior (e.g. producing unhealthy food — and the unhealthy consumer culture to go with it — may profit the food industry and a private health sector that has to deal with it, all of which require more use of resources. More examples are discussed on this site’s section on consumption and consumerism).
Our continued inefficient pumping of greenhouse gases into the environment without factoring the enormous cost as the climate already begins to change is perhaps an example where price signals may come too late, or at a time when there is already significant impact to many people. Resources that could be available more indefinitely, become finite because of our inability or unwillingness to change.
In effect, as TEEB, and many others before have argued, a key challenge will be adapting our economic systems to integrate sustainability and human well-being as well as other environmental factors to give us truer costs (after all, market systems are supposed to work when there is full availability of information).
Think of some of the effects this could have:
- Some industrial meat production, which is very harmful for the environment, may become more expensive
- For example, as mentioned in the previous link, if water used by the meat industry in the United States were not subsidized by taxpayers, common hamburger meat would cost $35 a pound.
- Instead of regulation to change people’s habits, markets would automatically reflect these true costs; consumers can then make better informed choices about what to consume, e.g. by reducing their meat consumption or demand more ecologically sustainable alternatives at reasonable cost.
- A reduction in meat production could protect forests or help reduce clearance of forests for cattle ranches, which would have a knock-on benefit for climate change concerns.
- Appropriate investment in renewable energy could threaten the fossil fuel industry though they are trying to adapt to that (perhaps slowly, and after initial resistance). But at the same time, governments that are able to use renewable sources are less likely to find themselves spending so many resources in geopolitical areas (e.g. politics, military, terrorist response to Western presence in Middle East, etc) to protect or secure access to fossil fuels.
- type of design — where products are designed to be produced and recycled or disposed of more sustainably — could considerably reduce costs for producers and consumers alike, and possibly reduce stress on associated ecosystems.
- Land that is used to produce unhealthy or marginally nutritious items (e.g. tobacco, sugar, possibly tea and coffee) could be used for more useful or healthier alternatives, possibly even helping address obesity and other issues. (For example, while factoring in environmental costs could make healthy produce more expensive too, expanding production of healthier foods could help contain costs rises to some extent.)
How much would such accounting save? It is hard to know, but there is a lot of waste in the existing system. In the mid-1990s, the Institute for Economic Democracy calculated that as much as half the American economy constituted of wasted labor, wealth and resources (book: World’s Wasted Wealth, II — see sample chapter).
Naturally, those who benefit from the current system may be hostile to such changes, especially if it may mean they might lose out.
This is a clear case of inter-related issues: the health of the environment is strongly tried to our economic choices (i.e. how we use resources), but addressing core short-comings in our economic systems is a crucial political challenge.
The Australian Government recognises the importance of biodiversity conservation and, in collaboration with states and territories, has set a national framework for biodiversity conservation over the next decade.
Biodiversity, or biological diversity, is the variety of all species on earth. It is the different plants, animals and micro-organisms, their genes, and the terrestrial, marine and freshwater ecosystems of which they are a part.
Biodiversity is both essential for our existence and intrinsically valuable in its own right.
This is because biodiversity provides the fundamental building blocks for the many goods and services a healthy environment provides. These include things that are fundamental to our health, like clean air, fresh water and food products, as well as the many other products such as timber and fiber.
Other important services provided by our biodiversity include recreational, cultural and spiritual nourishment that maintain our personal and social wellbeing. Looking after our biodiversity is therefore an important task for all people.
Over the last 200 years Australia has suffered the largest documented decline in biodiversity of any continent. Despite efforts to manage threats and pressures to biodiversity in Australia, it is still in decline.
The main threats to our biodiversity are:
- loss, fragmentation and degradation of habitat
- the spread of invasive species
- unsustainable use of natural resources
- climate change
- inappropriate fire regimes
- changes to the aquatic environment and water flows
National framework for biodiversity conservation
Australia’s Biodiversity Conservation Strategy 2010-2030 guides how governments, the community, industry and scientists manage and protect Australia's plants, animals and ecosystems until 2030.
Draft Revision of Australia’s Biodiversity Conservation Strategy – “Australia’s Strategy for Nature 2018-2030”
On 25 November 2016, Australian, state and territory environment ministers agreed to revise Australia’s Biodiversity Conservation Strategy based on the findings of a review into the first five years of the strategy’s implementation. The strategy has been revised to improve its ability to drive change in biodiversity management priorities and improve its alignment with Australia's international biodiversity commitments.
Australia’s Native Vegetation Framework supports Australia’s Biodiversity Conservation Strategy 2010-2030 by translating the strategy’s principles, priorities for action and targets into specific goals and targets for native vegetation.
Australian environment legislation - EPBC Act
The Australian Government has responsibilities for biodiversity conservation through the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) - the Australian Government's key piece of environmental legislation. It provides a legal framework to protect and manage nationally and internationally important flora, fauna, ecological communities and heritage places - defined in the Act as matters of national environmental significance.
National Landcare Program
The Australian Government’s National Landcare Program will invest $1 billion over the next four years to help drive sustainable agriculture as well as supporting the protection, conservation and rehabilitation of Australia’s natural environment.
The National Landcare Program merges previous funding initiatives into one simple program that puts Landcare back at the centre of natural resource management.
Across Australia, the National Landcare Program will support sustainable land management practices to deliver long-term benefits to our communities, our environment, our economy and our country.
The objective of the Environmental StewardshipProgram was to maintain and improve the quality and extent of targeted high public value environmental assets on private land.
The National Reserve System is a nation-wide network of reserves especially set up to protect Australia's unique natural environment for current and future generations.
Conservation on private land
The Australian Government recognises that conservation of biodiversity on private land is an important way to protect Australia's biodiversity.
State and territory governments and local governments also provide conservation incentives to private land holders.
Conservation incentives encourage or motivate people to participate in conservation activities. Incentives can be financial or non-financial in nature, and are typically offered by governments as part of an environmental program. Some incentives are linked to: management plans, placing covenants on land, conservation agreements, or to other permanent protection tools such as formal reservation.
Australian Government Incentives
- EPBC Act Conservation Agreements are agreements between the Australian Government Environment Minister and another person for the protection and conservation of biodiversity in an area of land or sea.
- The Department of the Environment has responsibility for a number of administrative arrangements relating to taxation concessions that seek to conserve and protect the natural environment.
- Tender based approaches and auctions for conservation payments are a new way to deliver funding to community groups and individuals for conservation works.
- Conservation covenants are voluntary agreements made between a landholder and an authorised body (such as a Covenant Scheme Provider) that aims to protect and enhance the natural, cultural and/or scientific values of certain land.
- Revolving Funds are joint Australian Government-state government investments which set aside money for the purpose of purchasing properties with natural or cultural values, placing a conservation covenant on the title and reselling the land to conservation-minded people. The proceeds from the sale of properties are used to buy more properties and sell them with a conservation covenant in place.
- Local government rate rebates and other incentives. Contact your local government for more information.
- Trading and offset schemes.
National Wildlife Corridors Plan
Information about the National Wildlife Corridors Plan is available in the National Library's Australian Governement Web Archive.