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Environment

Pricing the earth to save biodiversity

It's a threat overshadowed by climate change but no less menacing: Life on earth is being extinguished at a rate that will one day stop us in our tracks. Could pricing the earth be the way to save it – and ourselves?

Deforestation in Indonesia

Tropical rainforests are being cleared for biofuels across Asia

Great extinctions come and go. The earth has experienced five in the last half-a-billion years, and a number of lesser extinctions as well.

Usually, they're unleashed by a cataclysmic event – an asteroid impact or a super volcano. Scientists speculate that sometimes they've been triggered by gradual changes in the earth's atmosphere.

But what makes the so-called 'sixth great extinction' distinctive is us. This time around we are present to witness it. We also happen to be driving it.

According to the latest Global Biodiversity Outlook released last month, extinction rates may be up to 1,000 times higher than the background rate – the normal pace of extinction that has accompanied evolution on earth.

Bleak outlook

A Royal Bengal tiger roars at the Dhaka zoo in Bangladesh

Tigers are set to become extinct in the wild in 15 years

The decline is happening across the spectrum of life. Species are disappearing; genetic variety – a safeguard against disease – is being lost; and whole ecosystems, whose processes provide everything from habitats to the quality of our air, water and soils, are retreating.

Some are faring worse than others. Amphibians face the greatest risk and corals are deteriorating most rapidly. While the number of vertebrate species fell by nearly a third on average between 1970 and 1996, nearly a quarter of all plant species are estimated to be threatened with extinction.

In the last 110 years, India's wild tiger population has fallen by over 97.5 percent thanks to poaching and competition for land with humans.

"If business as usual continues, one can expect them (tigers) to be all extinct by 2025," says Dr Ashok Khosla, President of the International Union for Conservation of Nature (IUCN), the organization which catalogues the world's species in its so-called 'Red Lists.'

Another example which Khosla likes to cite from his native India is the sudden plunge in vulture populations in South Asia, which saw the birds' population drop from 40 million to 60,000 within a decade of the year 1992.

"It was discovered that a hormone fed to cattle for more milk was getting into the vultures…within eight years governments in India and Nepal and elsewhere had taken - luckily for us - action to stop the decline, but they were down to virtually extinct," Khosla said.

A Rosy Periwinkle found on Madagascar

The only known medication for childhood leukaemia comes from this threatened flower

A human-shaped footprint

The drivers for the loss of biodiversity can all be traced – directly or indirectly – to humans.

The principle pressures include habitat change (think monocultures and clear-felling), overexploitation (consider the ocean's fish stocks), pollution, invasive alien species (whose advances into new territories are usually abetted by people) and climate change.

In stark contrast to most of our fellow tenants on this planet, the human population has exploded in the last century. In 1900, the world's population was 1.6 billion people. Today it is roughly 6.9 billion and expected to rise to nine billion by 2050.

We've also been consuming more. According to this year's consumption report by the World Watch institute, the average American consumes six times as much today as he did in 1960.

Our numbers and behavior already suck up the resources of 1.4 planets, says the Global Footprint Network. According to its 'moderate' business as usual trends, we will need two planets to sustain us by 2050.

These figures have led to a growing sense of alarm in some quarters, and mounting calls for radical change.

"It takes by our collective bio-capacity at the moment 18 months to provide 12 months of natural goods and services, and it's heading in the wrong direction," says Andrew Simms, a policy director at the New Economics Foundation, a green-oriented think tank.

"So if we ask ourselves if orthodox price mechanisms are working at the moment, well obviously they're not, because they're not turning things around."

Pavan Sukhdev

Deutsche Bank economist Pavan Sukhdev is auditing nature



Services rendered

If living beyond our natural means comes with a cost, then putting a figure on that cost is the difficult job of Pavan Sukhdev, an economist at Deutsche Bank.

The banker is on loan to the United Nations Environment Program where he runs a study called The Economics of Ecosystems and Biodiversity (TEEB). The idea grew out of the Stern report of 2006 which laid out the economic case for tackling climate change.

"Economics today is the currency of policy," Sukhdev told a recent biodiversity conference.

"No matter how strong, no matter how emotive, no matter how powerful and no matter how human your arguments to do anything in this world, we are at a stage today where you will also be asked for economic justification. So whether you like it or not – indeed whether I like it or not – there will be a case of tradeoffs being evaluated."

From pollinating crops – a service worth up to seven billion dollars in the US, according to studies there – to wetlands' capacity to mitigate storm damage, there are myriad ways that ecosystems provide services not factored into our economies. Nine-out-of-ten new medicines is derived from something found in nature.

According to TEEB's interim report, we are sacrificing 1.3 to 3.1 trillion euros ($3.7 billion) worth of ecosystems services every year as our economies continue to treat the environment as an 'externality.'

To put that in perspective, that's up to twice the cost of failing to tackle climate change. Or to put it another way, it's the financial crisis every three years.

Yet even some potential allies remain wary of the drive to a market solution.

"We're faced with what I would call the paradox of environmental economics," said Andrew Simms.

"How, for example, would you put a price on the marginal ton of carbon, which when burnt, puts us on a path to runaway climate change? You're basically asking 'what is the price of civilization?' Even if a market allowed for the trading of that ton of carbon, I would argue that it should not be allowed."

Andrew Simms of the New Economics Foundation

Andrew Simms is concerned about the distinction between value and price

Squaring the circle

Nevertheless, if TEEB's aim is to rouse decision-makers to action out of concern for their state coffers, then there are signs that it's bearing fruit.

This year's Green Week (1-4 June), an annual environment conference organized by the European Union, was dedicated to the issue of biodiversity, and the bloc's executive used the event to announce two new tools aimed at halting biodiversity loss.

Recognizing the need for accurate information, the bloc's executive and the European Environment Agency unveiled a centralized clearing house for data called BISE – the Biodiversity Information System for Europe.

Taking a page out of the climate change play-book, they also established a "biodiversity baseline", which will be used to offer a snapshot of trends and measure progress on goals.

But as useful as the common starting point of 1990 levels of carbon emissions has been for climate action, how do you make a baseline for something as complex as biodiversity?

The EU's initial groping efforts have produced a five-page brochure with 15 charts. Though it's not as intuitively clear as a target for cutting emissions, it is an important step that will "help us review our actions and take tangible new measures," according to Environment Commissioner Janez Potocnik.

Wetlands reserved for birdlife in Perth, Australia

Could European farmers be paid to make wildlife reserves?

Rethinking the CAP

And other innovative ideas may be on their way.

The EU's Common Agricultural Policy (CAP) – a 50-billion-euro-a-year program of farm subsidies – has long been controversial for its distortion of trade and impact on developing countries.

There are now mounting calls to pay famers the money for habitat restoration instead, and at a fraction of the cost. A recent policy paper by the European Centre for International Political Economy found that "substantial" environmental gains could be secured at half the cost of the current CAP.

Yet reforming agriculture – a sector that eats up half the EU's budget – has always been a quagmire, despite the optimistic view, on the part of the EU's most senior environmental bureaucrat, that things are beginning to change.

"We will definitely see support for agriculture tied more and more – I can't say exclusively – to respect for the environment, and ecologically friendlier forms of production," Karl Falkenberg, Director General of the Environment Commission, told Deutsche Welle.

In any event, Europe will have to move fast if it is to have any shot at halting - and reversing - the loss of biodiversity, as it aims to do by 2020.

Like every region in the world, it failed to meet this year's deadline to halt biodiversity loss, a target laid down with no baseline, little information and no sub-targets in 2002.

The next goals will be set internationally when the global community gathers in Nagoya in October for the next Convention on Biological Diversity conference. If Europe and the world is to avoid another ground hog day, then political leaders will need to find the attention spans – and stomachs – to deal with 'two' environmental crises at once.

Author: Nathan Witkop
Editor: Rob Turner

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