On February 25 at our event with Business for Nature and WWF, we were joined by leaders to discuss the implications of the Dasgupta Review and the policy priorities needed to put nature at the heart of our economy.
- Professor Dasgupta, Frank Ramsey Professor Emeritus, University of Cambridge
- Iván Duque Márquez, President of Colombia
- Andrea Meza, Environment and Energy Minister of Costa Rica
- Vicky Robertson, Secretary of State for the Environment in New Zealand
In the Spring of 2019, the British Chancellor of the Exchequer commissioned the UK’s Economics and Finance Ministry – HM Treasury – to carry out an independent review on the economics of Biodiversity.
It was the first time a national finance ministry has commissioned a full assessment of the role of nature in underpinning economic prosperity.
The aim of the review was:
- to assess the economic benefits provided by biodiversity around the world,
- to assess the costs and risks of its continued loss,
- and to identify a range of recommendations that could simultaneously enhance biodiversity alongside economic prosperity.
The Dasgupta Review – named for its lead author Professor Sir Partha Dasgupta – is akin to the 2006 Stern Review on the Economics of Climate Change, likewise commissioned by the Chancellor and housed within the Treasury. Since its release, the Stern Review has elevated climate change to the top of the international agenda and has become among the most influential reports on climate ever produced.
The central message of the Dasgupta Review is one that will be familiar to many in our community: Our economies, livelihoods and well-being all depend on nature, and the accelerating collapse of the natural world is fuelling extreme risk and uncertainty for our economies and for our livelihoods, health and well-being.
The report calls for urgent and transformative changes in how we think, act and measure economic success, and sets out the ways in which we must account for nature in economics and decision-making.
“The survival of the natural world depends on maintaining its complexity, its biodiversity. Putting things right requires a universal understanding of how these complex systems work. That applies to economics too. This comprehensive and immensely important report shows us how by bringing economics and ecology face to face, we can help to save the natural world and in doing so save ourselves.” – Sir David Attenborough
Reversing the rapidly accelerating loss of natural ecosystems and the associated costs for humanity, the report states, requires urgent action. It finds that the cost of acting now is significantly less than the costs of inaction, and that this investment in nature would also work to achieve wider societal goals including addressing climate change (itself a major driver of biodiversity loss), promoting sustainable development and alleviating poverty.
So how do we take action?
The report recommends that nature enters economic and finance decision-making in the same way buildings, machines, roads and skills do, and that to achieve this ultimately requires changing our decision-making calculus, and our measures of economic success.
Recognising that nature, people, society and the economy are parts within an indivisible and deeply interconnected system, the report calls for the adoption of an ‘inclusive wealth’ approach to economic planning and decision making.
By measuring our wealth in terms of all assets, including natural, social and human capital, inclusive wealth measures provide a clear and coherent measure – as well as a holistic picture – that can be used by businesses, financial institutions and governments to enhance value across these assets.
The report recommends that introducing natural capital into national accounting systems would be a critical step towards making inclusive wealth our measure of progress.
It also recognises the importance of social capital, which – like biodiversity – it frames as an enabling asset, arguing that social capital – more simply, trust – is essential for the effective institutions needed for sustainable engagement with nature.
A capitals approach, which recognises that our success is dependent on the value we receive from the capitals, (natural capital, social capital, human capital and produced capital) is a critical framework that can empower the global community to operationalise the recommendations set out in the Dasgupta review.
“Among the key recommendations in the Dasgupta Review is the need to move towards an inclusive wealth model, where the value of natural, social and human capital sits at the heart of decision making alongside produced capital. The ‘capitals approach’ championed by the Coalition will be a critical framework to deliver the essential recommendations set out in the Review, and to protect the natural world, stable climate, social institutions and flourishing communities which together underpin our wealth, health, happiness and identity”. – Mark Gough, CEO, Capitals Coalition
Both a capitals approach and the Review recognise that we will only be successful If we tackle climate change, social inequality and biodiversity loss as a single multifaceted issue.
A capitals approach provides a practical framework that enables organizations to understand their direct and indirect relationships with the capitals, empowering them make decisions that offer the greatest value across the system.
We look forward to continued work with the Dasgupta Review team at HM Treasury in our shared goal to ensure that a systems approach sits at the heart of economic planning and decision making at all levels.