Nature loss bigger issue than current banking crisis

London, Oct 10 : A EU (European Union) commissioned study has determined that the global economy is losing more money from the disappearance of forests than through the current banking crisis.

The study puts the annual cost of forest loss at between 2 trillion dollars and 5 trillion dollars.

According to a report by BBC News, the figure comes from adding the value of the various services that forests perform, such as providing clean water and absorbing carbon dioxide.

The study, headed by a Deutsche Bank economist, parallels the Stern Review into the economics of climate change.

Some conservationists see it as a new way of persuading policymakers to fund nature protection rather than allowing the decline in ecosystems and species.

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 dollars, the reality is that at today's rate, we are losing natural capital at least between 2-5 trillion dollars every year," he added.

The review that 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 percent 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 free.

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.

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.

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. "Teeb will do the same for the value of nature, and show the risks we run by not valuing it adequately," he added.

ANI