The global economy is losing more money from the
disappearance of forests than through the current banking crisis,
according to an EU-commissioned study.
It puts the annual cost of forest loss at between $2 trillion and $5
The figure comes from adding the value of the various services that
forests perform, such as providing clean water and absorbing carbon
The study, headed by a Deutsche Bank economist, parallels the Stern
Review into the economics of climate change.
It has been discussed during many sessions here at the World
Some conservationists see it as a new way of persuading policymakers
to fund nature protection rather than allowing the decline in ecosystems
and species, highlighted in the release on Monday of the Red List of
Threatened Species, to continue.
Speaking to BBC News on the fringes of the congress, study leader
Pavan Sukhdev emphasised that the cost of natural decline dwarfs losses
on the financial markets.
"It's not only greater but it's also continuous, it's been happening
every year, year after year," he told BBC News.
"So whereas Wall Street by various calculations has to date lost,
within the financial sector, $1-$1.5 trillion, the reality is that at
today's rate we are losing natural capital at least between $2-$5
trillion every year."
The review that Mr Sukhdev leads, The Economics of Ecosystems and
Biodiversity (Teeb), was initiated by Germany under its recent EU
presidency, with the European Commission providing funding.
The first phase concluded in May when the team released its finding
that forest decline could be costing about 7% of global GDP. The second
phase will expand the scope to other natural systems.
Key to understanding his conclusions is that as forests decline,
nature stops providing services which it used to provide essentially for
So the human economy either has to provide them instead, perhaps
through building reservoirs, building facilities to sequester carbon
dioxide, or farming foods that were once naturally available.
Or we have to do without them; either way, there is a financial cost.
The Teeb calculations show that the cost falls disproportionately on
the poor, because a greater part of their livelihood depends directly on
the forest, especially in tropical regions.
The greatest cost to western nations would initially come through
losing a natural absorber of the most important greenhouse gas.
Just as the Stern Review brought the economics of climate change into
the political arena and helped politicians see the consequences of their
policy choices, many in the conservation community believe the Teeb
review will lay open the economic consequences of halting or not halting
the slide in biodiversity.
"The numbers in the Stern Review enabled politicians to wake up to
reality," said Andrew Mitchell, director of the Global Canopy Programme,
an organisation concerned with directing financial resources into forest
"Teeb will do the same for the value of nature, and show the risks we
run by not valuing it adequately."
A number of nations, businesses and global organisations are
beginning to direct funds into forest conservation, and there are signs
of a trade in natural ecosystems developing, analogous to the carbon
trade, although it is clearly very early days.
Some have ethical concerns over the valuing of nature purely in terms
of the services it provides humanity; but the counter-argument is that
decades of trying to halt biodiversity decline by arguing for the
intrinsic worth of nature have not worked, so something different must
Whether Mr Sukhdev's arguments will find political traction in an era
of financial constraint is an open question, even though many of the
governments that would presumably be called on to fund forest protection
are the ones directly or indirectly paying for the review.
But, he said, governments and businesses are getting the point.
"Times have changed. Almost three years ago, even two years ago,
their eyes would glaze over.
"Today, when I say this, they listen. In fact I get questions asked -
so how do you calculate this, how can we monetize it, what can we do
about it, why don't you speak with so and so politician or such and such
The aim is to complete the Teeb review by the middle of 2010, the
date by which governments are committed under the Convention of
Biological Diversity to have begun slowing the rate of biodiversity