EU study explores economic impact of 'great extinction'

BRUSSELS - Global policy makers could ultimately save more money if they step up investments to protect the Earth's biodiversity, according to a new report published on Friday (13 November).

Current-day decisions to exploit areas of land and sea frequently ignore the important role these areas play in regulating the environment and providing essential requirements such as fresh drinking water, with potential gains for society exceeding the fiscal costs of conservation by a ratio of 60:1, say the report's authors.

The 300-page, three-year-long study, The Economics of Ecosystems and Biodiversity, which draws comparisons with the landmark Stern Report which made a similar economic case for combatting climate change, was set up by Germany and the European Commission in response to a proposal in 2007 by G8 environment ministers as well as their counterparts from Brazil, China, India, Mexico and South Africa.

The document highlights the valuable role that nature plays in areas such as flood prevention and carbon storage, and shows that man-made efforts to tackle these issues invariably come at a far greater cost.

"Nature provides us with clean air, fresh water, food, materials and medicines. It helps regulate our climate and protects us from disaster," said EU environment commissioner Stavros Dimas at an event to launch the survey. "We tend to take them for granted but we can not survive without them."

The study's point man, Pavan Sukhdev, a senior figure at Deutsche Bank and a founder-director of the Green Accounting for Indian States Project, said current economic models largely ignore the value of these "environmental services."

And while the EU has done much to halt biodiversity loss with its Natura 2000 network of protected nature sites, there is still room for European improvement, the report added.

Species extinction at the global level is currently estimated to be occurring at between 100 and 1,000 times the normal rate, leading scientists to say we have entered the sixth Great Extinction in the planet's history, as a result of human activity.

At present, land-based protected areas cover 13 percent of the Earth's surface, with the figure a low six percent for territorial waters and 0.5 percent for open seas.

However, one sixth of the world's population (1.1 billion people) depend on these protected areas for a significant percentage of their livelihoods, with the communal benefits of environmental protection vastly outstripping any financial losses incurred by private individuals, the report says.

The economic argument to extend protected areas is therefore compelling, argue the authors, citing numerous case studies worldwide.

One example of the potential cost-benefit gains could be seen in Vietnam, where studies show that planting and protecting nearly 12,000 hectares of mangroves at a cost of just over $1 million (€0.67m) saved annual expenditures on dyke maintenance of well over $7 million (€4.7m).

Another could be seen in the Atlantic Ocean, with fishermen recording their best catches on the borders of protected areas that allow fish to grow to sexual maturity.

The report - the first in a four-part series - does not give a global aggregate for the potential savings through biodiversity preservation.

But the authors cite a 2002 study which estimates that increasing protected-area coverage to 15 percent of land and 30 percent of the earth's seas would cost roughly €30 billion ($45b) per year, but would net annual benefits of €3.0-3.5 trillion ($4.5-$5.2trn).

EU efforts and vested interests

As 2010 – the United Nations 'Year of Biodiversity' – draws closer, Mr Dimas said EU policies to protect species and habitats need to work their way into all levels of policy-making.

And while the bloc's list of protected areas under Europe's Habitat Directive and Wild Birds Directive have doubled over the last five years to over 25,000, vested interests are still working to slow the process to save species.

Mr Dimas also stressed the need for next month's UN climate conference in Copenhagen to deliver an agreement on tropical forest destruction. "This is crucial not only for the 80-90 percent of terrestrial biodiversity that live in the tropical forests, but also because 20 percent of global emissions are caused by tropical deforestation," he said.