U.N. experts warn of economic cost of species loss

Madeline Chambers, Reuters 29 May 08;

BONN, Germany (Reuters) - Mankind is causing 50 billion euros ($78 billion) of damage to the planet's land areas every year, making it imperative governments act to save plants and animals, a Deutsche Bank official told a U.N. conference.

A study, presented to delegates from 191 countries in the U.N.'s Convention on Biological Diversity on Thursday, said recent pressure on commodity and food prices highlighted the effects of the loss of biodiversity to society.

"Urgent remedial action is essential because species loss and ecosystem degradation are inextricably linked to human well-being," said Pavan Sukhdev, a banker at Deutsche Bank and the main author of the report.

On top of the current 50 billion euros annual loss from land-based ecosystems caused by factors including pollution and deforestation, the cumulative loss could amount to at least 7 percent of annual consumption by 2050, said the report.

Deforestation, if continued at current levels, would cost some 6 percent of world gross domestic product by 2050, he said.

The idea of the report is to spur action to safeguard wildlife in the way Britain's Stern report sparked action to fight climate change after the economic costs were outlined, German Environment Minister Sigmar Gabriel said.

European Environment Commissioner Stavros Dimas said the study proved biodiversity was not just about saving pandas and tigers but underscored the need to preserve natural wealth.

"The report shows we are eating away at our natural capital and making ourselves vulnerable to climate change," he said.

Delegates and environment groups praised the report, entitled "The Economics of Ecosystems and Biodiversity", saying the figures helped make the case for integrating biodiversity into policy.

Sukhdev will present a second, fuller, report next year.

Delegates at the U.N. meeting are trying to agree on ways to save species which experts say are facing their biggest crisis since the dinosaurs died out 65 million years ago. Three species vanish every hour, they say.

"CRUNCH TIME"

The conference ends on Friday and environmentalists warned that much still had to be done, even after 11-days of negotiations on issues like creating and managing protected natural areas, tackling deforestation and invasive species.

"This is crunch time," said WWF Director General Jim Leape. "We're gathered here under urgent circumstances."

Gabriel said progress had been made on a roadmap for rules on access to genetic resources and sharing their benefits.

Sukhdev warned if no action is taken, 11 percent of the earth's natural areas could be lost by 2050, mainly due to farming, infrastructure growth and climate change.

He also said research showed the world's commercial fisheries are likely to have collapsed within 50 years unless trends are reversed. That would be devastating for the 1 billion people who rely on fisheries for protein and could lead to up to $80 billion to $100 billion in income loss for the sector.

The report says assigning just 1 percent of global GDP could achieve significant improvements in air and water quality and human health as well as ensure progress towards climate targets.

(Reporting by Madeline Chambers, editing by Alister Doyle and Ibon Villelabeitia)

Ecosystem damage costs trillions per year: study
Yahoo News 29 May 08;

Environmental damage and species loss costs between 1.35 and 3.1 trillion euros (2.1 to 4.8 trillion dollars) every year, according to a report released Thursday at a major UN conference on biodiversity.

The study, commissioned by the European Union (EU) and the German government, is the biggest assessment ever made of the economic impact of ecological damage, and supporters compared it to the famous "Stern Report" on the cost of climate change.

It was issued at a meeting of the UN Convention on Biodiversity, a 12-day meeting in Bonn of 6,000 representatives from 191 nations due to wind up on Friday.

The report, entitled "The Economics of Ecosystems and Biodiversity," attaches a monetary value to species and to environmental assets that usually are not considered in cash terms.

It looks, for instance, at the dollar value of clean water, healthy soil, protection from floods and soil erosion, natural medicines and natural sinks that store greenhouse gases such as carbon dioxide (CO2) and methane.

"Though our wellbeing is totally dependent on these 'ecosystem services', they are predominantly public goods with no markets and no prices," the report notes.

Principal author Pavan Sukhdev, who heads Deutsche Bank's global markets business in India, described this lack as "trying to navigate uncharted and turbulent waters with an old and defective economic compass."

Sukhdev warned that some ecosystems were probably already damaged beyond repair, and predicted other systems would be badly wounded unless protective measures were urgently taken.

He said that by 2050, under a "business-as-usual" scenario, these catastrophes loom:

-- 11 percent of natural areas remaining in 2000 could be lost due to conversion to agriculture, development, and climate change;

-- 40 percent of land currently under low-impact agriculture could become intensively farmed, accelerate biodiversity losses;

-- 60 percent of coral reefs could be lost, directly affecting the livelihood of a billion people.

As with climate change, the consequences of this damage will fall mainly on the world's poorest and most vulnerable denizens, according to the report.

The true value of biodiversity and ecosystem services must be incorporated into policy decisions, the study said.

Environmental groups at the meeting in Bonn welcomed the report. "This is a long overdue recognition of biodiversity as a key development issue," said Gordon Shepard, director of international policy for World Wildlife Fund International.

The report puts a spotlight "on the economic value of biodiversity both to our global economy and for the millions of people directly dependent on natural resources for their livelihoods," he said.

Joan Ruddock, the British Minister for Wildlife, said the report "is vital to the effort to stem the loss of species and habitats," and announced that Britain would help fund a fuller study.

About 150 species of flora and fauna go extinct every day, a rate that is 100 to 1000 times higher than a natural dying out of species, according to scientists.

The inspiration for the new report is the landmark 2006 assessment by British economist Sir Nicholas Stern that sparked awareness about the economic cost of global warming.

Stern said that climate change could shrink the global economy by as much as 20 percent, but if action were taken immediately, the bill would be only one percent of global gross domestic product (GDP).

Nature loss 'to hurt global poor'
Richard Black, BBC News website 29 May 08;

Damage to forests, rivers, marine life and other aspects of nature could halve living standards for the world's poor, a major report has concluded.

Current rates of natural decline might reduce global GDP by about 7% by 2050.

The Economics of Ecosystems and Biodiversity (TEEB) review is modelled on the Stern Review of climate change.

It will be released at the Convention on Biological Diversity (CBD) meeting in Bonn, where 60 leaders have pledged to halt deforestation by 2020.

"You come up with answers like 6% or 8% of global GDP when you think about the benefits of intact ecosystems, for example in controlling water, controlling floods and droughts, the flow of nutrients from forest to field," said the project's leader Pavan Sukhdev.

"But then you realise that the major beneficiaries [of nature] are the billion and a half of the world's poor; these natural systems account for as much as 40%-50% of what we define as the 'GDP of the poor'," he told BBC News.

Globalised decline

The TEEB review was set up by the German government and the European Commission during the German G8 presidency.

The two institutions selected Mr Sukhdev, a managing director in the global markets division at Deutsche Bank, to lead it.

At the time, in an article for the BBC News website, Germany's environment minister Sigmar Gabriel wrote: "Biological diversity constitutes the indispensable foundation for our lives and for global economic development.

"[But] two-thirds of these ecosystem services are already in decline, some dramatically. We need a greening of globalisation."

The document to be released at the CBD is an interim report into what the team acknowledges are complex, difficult and under-researched issues.

The 7% figure is largely based on loss of forests. The report will acknowledge that the costs of losing some ecosystems have barely been quantified.

The trends are understood well enough - a 50% shrinkage of wetlands over the past 100 years, a rate of species loss between 100 and 1,000 times the rate that would occur without 6.5 billion humans on the planet, a sharp decline in ocean fish stocks and one third of coral reefs damaged.

However, putting a monetary value on them is probably much more difficult, the team acknowledges, than putting a cost on climate change.

The report highlights some of the planet's ecologically damaged zones such as Haiti, where heavy deforestation - largely caused by the poor as they cut wood to sell for cash - means soil is washed away and the ground much less productive.

'Too little, too late'

There are some indications that biodiversity and ecosystem issues are now being heard at the top tables of politics.

G8 environment ministers meeting in Japan last weekend agreed a document noting that "biodiversity is the basis of human security and... the loss of biodiversity exacerbates inequality and instability in human society".

It also emphasised the importance of protected areas and of curbing deforestation.

At the CBD on Wednesday, 60 countries signed pledges to halt net deforestation by 2020.

But the main CBD target agreed by all signatories at the Rio de Janeiro Earth Summit in 1992 - to "halt and begin to reverse" biodiversity loss by 2010 - is very unlikely to be met.

An early draft of the TEEB review, seen by BBC News, concluded: "Lessons from the last 100 years demonstrate that mankind has usually acted too little and too late in the face of similar threats - asbestos, CFCs, acid rain, declining fisheries, BSE and - most recently - climate change".

The Stern Review talked to governments in a way that earlier climate reports could not, because it was written by and for economists; and the architects of TEEB hope it will eventually do the same thing for biodiversity.