A cynic, Oscar Wilde wrote, is someone who 鈥渒nows the price of everything and the value of nothing.鈥� On that basis, our 颅dominant economic system 鈥� corporate capitalism 鈥� is beyond cynical. It takes Wilde鈥檚 aphorism one giant step further because it doesn鈥檛 even know or take into account the price of everything, never mind recognize and account for that which is priceless.
That, if not quite in those words, is the conclusion of a startling review of the 颅economics of biodiversity by the distinguished Cambridge economics professor Sir聽Partha Dasgupta. Startling not just because of what he says, but because of who commissioned his report: the Chancellor of the Exchequer (read 鈥淢inister of Finance鈥�) in Boris Johnson鈥檚 U.K. government. So this week, I am taking a side trip on the road to Doughnut Economics to consider his important report. Next week I will look at how we will have to change.
What Professor Dasgupta has to say is both simple and profoundly important: We have not correctly included either the price or the value of nature in our economic models and practices, or in the price of our goods and services. Instead, we treat them as an 鈥渆xternality,鈥� by which he means 鈥渢he unaccounted-for consequences for others, including future people, of actions taken by one or more persons.鈥� In other words, we gain at the expense of people elsewhere, future generations and, he might have added, other species.
The result of ignoring the harm to nature (and, he might also have added, harm to people鈥檚 health and the social wellbeing of communities) caused by our economic 颅system and way of life, he writes, is that 鈥渨hile humanity has prospered immensely in recent decades, the ways in which we have achieved such prosperity means that it has come at a devastating cost to Nature.鈥�
In fact, he reports, 鈥渂etween 1992 and 2014, produced capital per person 颅doubled, and human capital [health, education, 颅aptitude and skills] per person increased by about 13 per cent globally.鈥� However, he adds, 鈥渢he stock of natural capital per person declined by nearly 40 per cent.鈥� 颅Moreover, we should note that this is only over 22 years; the decline since the onset of the 鈥済reat acceleration鈥� in human impact in the 1950s is far greater.
The result is that 鈥渕any ecosystems, from tropical forests to coral reefs, have already been degraded beyond repair, or are at imminent risk of 鈥榯ipping points.鈥� These tipping points could have 颅catastrophic consequences for our economies and 颅well-being.鈥� Sadly, as he notes, this 鈥渋s what economic growth and development has come to mean for many people.鈥�
But even if we could include the cost of ecological harm in the price of our goods and services, that would not be enough. Professor Dasgupta notes: 鈥淣ature is more than an economic good: many value its very existence and recognize its intrinsic worth,聽too.鈥�
This view is evident in a 2018 report from the International Institute for 颅Sustainable Development on the measurement of 鈥渃omprehensive wealth,鈥� by which they mean the combination of five forms of capital: produced (infrastructure, buildings and machinery), natural, human, financial (stocks, bonds and cash) and social capital.
While some forms of natural capital 鈥� so-called market natural assets (such as the minerals, fossil fuels, timber, water resources and fish we extract) 鈥� can be expressed in monetary terms, other forms of natural capital 鈥� a stable and warm 颅climate and key ecosystems such as forests, wetlands, grasslands, lakes/rivers and the oceans 鈥� 鈥渁re, effectively, priceless.鈥�
That is because the latter 鈥渁re critical to well-being. Any degradation in them imposes direct and irreplaceable costs on well-being, and their monetary value is, therefore, not relevant.鈥� So while we may be able to measure and account for some forms of natural capital, those ecosystem 鈥済oods and services鈥� that are critical to our 颅wellbeing 鈥渃annot (and should not) be included in aggregate measures of 颅comprehensive wealth.鈥�
In other words, it is not enough to 颅understand the price of nature; we need to recognize that it is to a significant degree priceless, of inestimable value.
As a society, we need to know not just the price but the value of nature, and we need an 颅economic system that recognizes and incorporates this.
Dr. Trevor Hancock is a retired 颅professor and senior scholar at the University of 颅Victoria鈥檚 School of Public Health and Social Policy.
