life on earth
anyone who has ever stepped outside can
appreciate the value and the richness
that the natural world brings to our
lives but right now we are destroying
nature much faster than it can be
restored
so if nature is so valuable why are we
so bad at preserving it
one reason is that that value is very
hard to measure in conventional economic
terms there's a disconnect between
appreciating the damages we're causing
and embedding it to our own way of
economic thinking
it's been a free resource which it can't
be 75
of our land is now damaged 66 of our
marine life
and many businesses are starting to see
these pressures
this disconnect between nature and the
economy is evident in the level of
financing available to projects that
protect
plants and animals and their habitats
which is somewhere between 80 to 90
billion dollars a year
that's just a fraction of the total
that's needed to reverse the loss
of species that we see today but if the
economics were different
could businesses be incentivized to
protect the natural world
and would investors follow suit the
challenge is that many of the benefits
of nature
are intangible and the costs of
destroying it often go uncounted
but it turns out there are a number of
ways that you can measure the value of
nature
and some of them might surprise you
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too often nature has been seen as a
source of unlimited materials and a free
dumping ground for industrial output
but that could change if we start to
count the cost of destroying natural
habitats
professor parta dasgupta is leading a
review into the economics of
biodiversity for the uk treasury
part of his work is to look beyond the
market price of natural resources
many resources have a market price
but they're wrong ones so for example a
fishery has a market price you can
you can buy and sell fisheries as we do
farms for example
fish farms but that's not quite
dish because the shrimp frogs for
example are extremely polluting
they discharge salt and other chemicals
that adversely affect neighboring paddy
fields for example if you happen to be
in sri lanka
that damage needs to be costed and
deducted from the value of the fishery
costing up the damage from one fishery
is one thing
but applying that thinking on a global
scale is another
while economists are trying to change
the framework of our economic thinking
businesses are not waiting around for
many companies the cost of climate
change and the impact of damaging nature
are already too apparent
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we see businesses being worried about
stranded assets
we see disruptions in the business
process so investing in nature on the
one hand means
mitigating risk paul pullman is a former
chief executive of unilever
he now leads an organization calling on
other ceos
to change the way they do business to
safeguard natural resources
broadly business people know what needs
to be done
where the challenge has come in is the
complexity of the issues
and a feeling for yeah we know that we
want to restore it
but how can i as a business integrate
that into my business models
and one of the things that are
absolutely needed to make that evolution
at the speed and scale
is to put a price on these scarce
resources put a price
on water put a price on carbon and put a
price on forests
i've said many times as long as a dead
tree is valued
more than a tree that is alive we are in
trouble
underlying all of this is the idea of
natural capital
that means valuing forests and other
habitats not only for the goods they
could be turned into if they're chopped
down
but for the services they can provide if
they're left standing
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ecologists already understand how nature
acts as a climate buffer
by pulling huge amounts of carbon
dioxide out of the atmosphere
through photosynthesis plants converts
co2 in the atmosphere
into reduced forms which they use to
grow and that carbon enters plants and
soil pathways
and as soon as it's there it's
essentially scrubbed out of the
atmosphere
and so these natural processes offset
about one one-third of our global carbon
dioxide emissions
every year this has made planting
forests a very popular option for
companies that want to offset their
carbon emissions
but colin thinks restoration projects
could do even more
you know we can go there and plant pine
trees and they grow great
they sequester carbon but they're not
restoring any of that native
biodiversity and so
when we do restoration we're looking for
to hit both of these goals both this
sort of nature-based climate solution of
sequestering carbon but also addressing
sort of this habitat loss and this
biodiversity loss
you know this is one of few climate
solutions
that also has the opportunity to
actually address the biodiversity crisis
that awareness is starting to work its
way into how businesses and governments
think about conservation at the same
time something just as significant is
happening in the financial sector
investors are finding new ways to fund
nature-based projects
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hsbc is launching a new natural capital
fund
which will invest in projects that
restore nature and deliver financial
returns
it will invest in in real assets so
in in in land in forests in
mangroves and the returns will come from
long-term preservation
as well as the goods and services or
goods that we'll be
generating with those assets so food and
timber
so we're trying to establish nature
based investing as an asset class in its
own right that
pension funds insurance companies asset
allocators would make a discrete
allocation to in the same way as they
would
real estate or infrastructure this fund
is the first of its kind and
it doesn't have regulatory approval yet
but if other asset managers follow suit
it could start to unlock some of the
financing that's needed to repair nature
at a large scale
by some estimates it would take more
than two trillion dollars to truly
restore nature and transition to a
low-carbon economy
that's a tall order for governments
still grappling with the impacts of
covid19
but as economists companies and
investors start to measure the value of
nature in new ways
maybe the way we think about this
challenge will change the
trillions of dollars that are required
to be invested in nature
need to come from somewhere private
sector is
is best position and if business speaks
up
and says when we do this collectively it
creates more jobs
it makes your economies more resilient
it gives these politicians that are
often short-term focused
it gives them more ammunition to move
things forward
that value which is so important for
enriching our lives
why shouldn't that be included in
economic reasoning in a natural way as
opposed to constantly have to
do special pleading protest marches and
so forth
we're in a biodiversity crisis the trees
can't wait
the forest can't wait we need action
now