There is no question that supply of land is limited. We must find ways of using it wisely to protect the ecosystem services on which all economic activity depends
Victor Anderson for the Guardian Professional Network guardian.co.uk 3 Feb 11;
There have been many arguments about "peak oil" and the depletion of metals, but there is one resource that without doubt is limited in supply: land. Unlike most ordinary products, an increase in the price of land doesn't bring about an incentive to produce any more of it - because there can't be any more. The Dutch reclaimed land from the sea, but rising sea levels now mean we have less land.
Geopolitical competition for territory among major powers is well known. But there is another competition for territory taking place today which is potentially far more important for the future: the competition for land use; dividing up the finite amount of land which exists.
The competition is between three major uses: 'wild land', especially forest; agriculture; and urban uses, such as industry, housing and transport.
The ecosystems and biodiversity which underpin all economic activity depend largely on 'wild land' - very much a poor relation in the competition with agriculture and urbanisation, both of which have massive economic forces in their favour.
Agriculture is driven by the demand for food. This demand is growing because of the rising population and more demand for meat, which requires more land than crops. Urbanisation is backed by the economic power of manufacturing, and the influx of economic migrants from countryside to towns and cities.
Wild land has no such strong purchasing power to defend its position and, therefore, is set to decline, affecting biodiversity and ecosystems with disastrous consequences leading to reduction of tropical forest area, loss of species, and reduced capacity for absorbing carbon.
It is not essential for land to be left wild to be productive ecologically: agriculture and urban areas can be designed in ways which maintain ecosystems. But whether land is left wild or combined with other uses, the survival of the services ecosystems provide - such as genetic resources, good quality soil, available water, pollination - is an essential underpinning of the world economy and people's livelihoods. There are enormous risks to companies if this issue is not adequately addressed, but unfortunately most have not yet woken up to this fact, as McKinsey's found in a survey last August.
WWF will be publishing two reports this week which highlight key issues with important implications for the question of land use: one on food, 'The LiveWell Plate', showing how ecological and health objectives can be combined; and 'The Energy Report', a long-run global energy strategy.
Can we incentivise people to maintain the ecosystems we all depend on? This question has been addressed over the past few years by the The Economics of Ecosystems and Biodiversity (TEEB) reports. It was billed as doing for biodiversity what the Stern Report did for climate change - that is, constructing an economic argument for why it matters, and providing economic policy proposals for how to address the problem.
TEEB produced useful reports, and there are currently discussions taking place about how the work can be continued. Its major points are clear and important. Ecosystem services are vital, must be maintained, and in a global economy based on money, that means they have to be paid for.
It is a sign of how much further climate change is up the political agenda relative to biodiversity that the first major international programme to conserve forests, REDD, has been arrived at through the climate change convention (where it is seen as a relatively cheap way of dealing with carbon) rather than through the biodiversity convention, where the emphasis would have been on extinctions and ecosystems.
Payment for ecosystem services is likely to find its way on to the agenda for the next UN conference on sustainability, Rio+20, to be held in Rio de Janeiro in May 2012, twenty years after the Rio conference where the climate and biodiversity conventions were signed.
Land use economics should be a key issue for the conference. There is a worldwide market for land in which ecosystems need to be able to compete but that will require even more money than suggested by TEEB authors.
Victor Anderson is 'One Planet Economy' leader at WWF
