Accounting for biodiversity loss
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Some tools focus on a particular type of ecosystem. Global Forest Watch, for instance, is an online open- source platform that uses satellite image analysis to provide near real-time information about where and how forests are changing around the world. 70 Water Risk Filter 71 is a portfolio-level screening tool for corporations to assess water risks 72 including baseline water stress and estimated flood occurrence. 73 Ocean Data Viewer 74 assesses marine biodiversity using datasets related to coral reefs, seagrasses, saltmarshes and mangroves. Other tools cut across all systems. The Integrated Biodiversity Assessment Tool 75 provides datasets on Key Biodiversity Areas (KBAs), the most important places in the world for species and their habitats. By accessing these datasets, commerical users, private industry and other stakeholders can make decisions about how to manage land (or water), where to avoid development and how best to conserve and protect species. The data sets have been used by the World Bank and International Olympic Committee. 76 Co$tingNature is an open-access tool, used by more than 3,500 organisations in 180 countries, for mapping risks to nature and NCPs. It is capable of presenting output metrics in dollar units through economic valuation and as Nature’s contributions to achieving the SDGs. 77 Another accounting system that is currently being piloted is Gross Ecosystem Product (GEP). Calculated in similar ways to GDP, GEP is a means of aggregating all NCPs in a single, monetary metric. Recent research has highlighted successful implementation of GEP in China. The United Nations Statistics Division is developing ways to scale and standardise GEP as a global reporting metric. 78
THE DASGUPTA REVIEW
“…incomplete accounting occurs in the exploitation of other natural resources, especially in the case of resources that are not capitalised in enterprise or national accounts: air, water, and soil. In all countries, rich or poor, economic development must take full account in its measurements of growth of the improvement or deterioration in the stock of natural resources.”
February 2021 saw the final report of an in-depth study on the “Economics of Biodiversity” commissioned by the UK’s HM Treasury and led by Cambridge University Economist, Professor Sir Partha Dasgupta. The 610-page- long Dasgupta Review 56 is the result of an 18-month long independent global assessment on the economics of biodiversity. The Review positions natural capital accounting within a wider framework of changing measures of economic progress. 57 It argues that if the goal of society is to protect and promote well-being across generations, “inclusive wealth” (encompassing produced capital, human capital and natural capital) is a better yardstick than GDP. 58 Natural capital accounting permits the valuation of ecosystem services: the global value of ecosystem services is estimated at USD 125-145 trillion per year. 59 USD 44 trillion of economic value generation over half the world’s total Gross Domestic Product (GDP) is estimated to be moderately or highly dependent on nature. 60 The loss of ecosystem services between 1997 to 2011 cost the world around USD 20 trillion per year. 61 These numbers cannot begin to capture the intangible value that ecosystems provide to humans.
Our Common Future, 1987
In 2012 the UN Statistical Commission adopted the System of Environmental Economic Accounting (SEEA) to integrate economic, environmental and social data into a single, coherent framework for holistic decision-making. 50 The SEEA provides a consistent monitoring framework that produces an actionable set of indicators on ecosystem condition, as well as the supply and use of ecosystem services. 51 Importantly, it allows NCPs to be expressed in monetary terms so that decision-makers can compare them to other goods and services. 52 Numerous accounting standards, such as the Natural Capital Protocol 53 , ISO 14007 and 14008 54 (environmental impact valuation), have developed since then and there are growing calls for standardisation. 55
New approaches to measuring biodiversity
Given that biodiversity encompasses the diversity of all living things unique to each ecosystem, it is notoriously difficult to measure. 62 Essential Biodiversity Variables (EBVs) aim to capture major dimensions of biodiversity change 63 by measuring ecosystem structure, ecosystem function, community composition, species population, species traits and genetic composition. 64 A simpler framework focuses on conservation status, population trends and biotic integrity (essentially, community composition). 65 Other frameworks, such as the Red List Index, 66 the Living Planet Index 67 or the Biodiversity Intactness Index 68 use population and distribution data, among others, to measure the state of the world’s biodiversity across species or geographical areas. 69 56 The Economics of Biodiversity: The Dasgupta Review, HMTreasury, February 2021. 57 Ibid. 58 Ibid. 59 Robert Costanza et al., The value of the world’s ecosystem services and natural capital, Nature, 15 May 1997. 60 Briefing for Finance: Biodiversity, Accounting for Sustainability, 2021. 61 Robert Costanza et al., The value of the world’s ecosystem services and natural capital, Nature, 15 May 1997. 62 The Economics of Biodiversity: The Dasgupta Review, HMTreasury, February 2021. 63 What are EBVs?, GEO BON. 64 The Economics of Biodiversity: The Dasgupta Review, HMTreasury, February 2021. 65 Georgina M. Mace et al., Aiming higher to bend the curve of biodiversity loss, Nature Sustainability, 14 September 2018. 66 IUCN Red List of Threatened Species, IUCN, 2022. 67 Living Planet Index, Zoological Society of London andWWF, 2014. 68 Helen Phillips et al., The Biodiversity Intactness Index - country, region and global-level summaries for the year 1970 to 2050 under various scenarios, 28 October 2021. 69 The Economics of Biodiversity: The Dasgupta Review, HMTreasury, February 2021.
50 Principles of Natural Capital Accounting, Office for National Statistics, 24 Febru- ary 2017. 51 The Role of the System of Environmental Economic Accounting as a Meas- urement Framework in Support of the post-2020 Agenda, United Nations Committee of Experts on Environmental-Economic Accounting, 14 December 2018. 52 Ibid. 53 Natural Capital Protocol, Capitals Coalition, 14 January 2021. 54 Liz Gasiorowski, Calculating the value of the environment with new ISO stand- ard, ISO, 14 November 2019. 55 CORPORATE NATURAL CAPITAL ACCOUNTING — from building blocks to a path for standardization - Understanding the landscape, leading applications, challenges and opportunities, Transparent, April 2021.
70 Forest Monitoring, Land Use & Deforestation Trends, Global Forest Watch. 71 WWFWater Risk Filter 6.0,WWF, 2022. 72 Ibid. 73 WRF Methodology,WWF, February 2022. 74 Ocean Data Viewer, UNWCMC. 75 Integrated Biodiversity Assessment Tool, IBAT. 76 Ibid. 77 Costing Nature, King’s College London, AmbioTEK. 78 Zhiyun Ouyang et al., Using gross ecosystem product (GEP) to value nature in decision making, Proceedings of the National Academy of Sciences of the United States of America, 23 June 2021; Sarah Cafasso, Accounting for nature in economies, Stanford News, 09 June 2020.
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