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Green dollars to save the planet?

Richard Black | 04:38 UK time, Thursday, 21 October 2010

From the UN Convention on Biological Diversity meeting in Nagoya:

If there are any youngsters in your neighbourhood who are looking to you for career advice, environmental accountancy might be a good thing to recommend.

Ledger

Forget studying iconic animal species - forget plants - even forget fungi and soil bacteria.

Top of the agenda when it comes to saving nature - at least, here - is the notion of giving economic value to services the big outdoors does for us, and pricing out unsustainable use - Payment for Ecosytem Services.

Here's the thing. According to the draft agreement [1.74MB PDF] before negotiators here at the CDB, safeguarding nature across the planet will cost between $30bn and $300bn per year.

That's between 10 and 100 times more than is spent on it at the moment.

No-one claims, by the way, that these numbers are accurate down to the last dollar - they're indicative only.

And they indicate two things. Firstly, a massive spend would be needed; and secondly, given that most highly biodiverse areas are in the relatively poor countries of the tropics, that spend would mean another transfer of money from the industrialised to the developing world - at its upper end, a vast one, dwarfing both existing overseas development aid and the projected $100bn per year for climate change.

However, when you add a third figure into the mix - the $2-5 trillion per year that loss of nature is costing the global purse, according to The Economics of Ecosystems and Biodiversity (Teeb) project - it still looks a good investment.

The key to making it work - at least in the draft agreement here - is to change the economic paradigm.

These are the key clauses - I've somewhat presumptuously taken out the infamous square brackets and tidied things up a bit (something that's much easier for me to do than for negotiators) so as to focus on the general sense:

- by 2020, at the latest, the values of biodiversity are integrated into national accounts, national and local development and poverty reduction strategies and planning processes

- by 2020, at the latest, incentives harmful to biodiversity are eliminated, phased out or reformed in order to minimise or avoid negative impacts and positive incentives for the conservation and sustainable use of biodiversity are developed and applied.

So if current economics encourages the degradation of nature - change the economics.

There are many reasons why the idea might be a tall order to implement, even if governments agree it here.

Dragonfly

What is the economic value of a tree - or a shrew, or a dragonfly? How can the costs and benefits of planting a field with monoculture maize be quantified against the costs and benefits of not doing so, and instead doing something with it that benefits biodiversity?

Mind you, it's something that some businesses are looking at already - some with an eye to their reputation, but others in order to secure their supply chain.

The clearest example cited by Pavan Sukhdev, the Deutsche Bank capital markets expert who's leading the Teeb project, is Coca-Cola, which has adopted a commitment to "no net impact on fresh water by 2020", or "water neutrality".

It's not hard to see why. A heck of a lot of water goes into that fizzy pop; lose the ecosystem services that keep the water flowing - all those forested watersheds, for example - and business costs soar.

Even though there are questions about what "water neutrality" means, it's this sort of thing that environmental accountants envisage taking hold in companies and governments across the world - an economics-backed greening, where not much else has worked.

It's beginning to happen in Japanese companies too, according to Yoji Yokoyama, who works on biodiversity with Dentsu, Japan's biggest advertising agency.

"Biodiversity has been thought of as a theme for environmentalists," he told me.

"But now many business persons are paying attention, and they study, and they've found it's a good topic for their business - they need to manage the risks."

The World Bank is set to come in on the act by unveiling an expansion of its Green Accounting initiative that will aim to analyse the economies of selected countries along environmental lines - we should find more about that next week.

Hence the careers advice - although perhaps you'd better wait until seeing this meeting's outcome before deciding just how much of a good idea it's likely to be.

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