A world of absurd thinking

OPINION:World leaders need to take full account of the value of nature in their economic thinking, or Rio+20 will just be more hot air, writes PADDY WOODWORTH

IT IS VERY tempting to be cynical about events such as next week’s Rio+20 summit on sustainable development. Unfortunately, many of the participating governments offer us ample ammunition. But far too much is at stake in these discussions to allow ourselves the luxury of cynicism.

We need to recognise the idiocy of world leaders drafting grand-sounding environmental good intentions while their economic policies pave the road to environmental hell.

There is indeed something sickeningly absurd about these gatherings. Politicians who are committed to traditional growth models of economics sing the praises of sustainability for a few happy-clappy days in Brazil. Then they go back to business as usual, subsidising and promoting the practices that are wrecking the environmental infrastructure of our economies at a terrifying rate.

The Living Planet index shows that we would need to make Earth 50 per cent bigger just to sustain our current consumption of natural resources. If we maintain this pattern, we will theoretically need two planets by 2030.

Sustainable development is defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs. But we are moving in the opposite direction. The Economics of Ecology and Biodiversity (Teeb), a ground-breaking assessment of the global “value of nature”, reveals that our current ways of doing business incur environmental costs, unaccounted for in our current national economic indicators, of €3.2 trillion a year.

The way we organise our market economies, says the Teeb study leader Pavan Sukhdev, a former merchant banker, “makes nature invisible”. But new ideas for making nature visible economically, and doing business sustainably, are emerging. Teeb offers many examples. And there are tentative but encouraging signs that these models are starting to gain traction with policymakers in both governmental and corporate worlds.

They show that our tendency to view the environment as a backdrop, as a pretty but dispensable accessory to the real human world of earning livelihoods and raising families, is a dangerous fallacy. Far from being dispensable, healthy environments are essential to human welfare and, ultimately, to human survival. There is an understandable perception that Rio+20 is about “saving whales”. But what it should be about is saving ourselves from our lethal failure to understand the relationship between the environment and our economies.

The late Gaylord Nelson, a former American senator and a passionate advocate for small business as well as for green issues, expressed this relationship very succinctly: “The economy is a wholly owned subsidiary of the environment, not the other way around.”

The primary value of nature to humans is that it provides the natural capital; “the limited stocks of physical and biological resources found on earth”, as Teeb puts it, that underpin our economies. And these stocks of capital produce “interest”, which is, in Teeb’s words, “the limited capacity of ecosystems to provide ecosystem services” such as the regeneration of earth and fish stocks, water filtration and flood control, not to mention climate regulation.

There are two vital points here. Firstly, these stocks are limited, but we treat them as if they were infinite, as we do not account for their depletion. Secondly, prudent management would tell us that we should be living off the interest, and investing in restoring natural capital, the way farmers do, or used to do, through fallowing. Instead our planet’s natural capital account is plummeting into deficit at a rate that makes Anglo Irish Bank’s former bosses look prudent. But this deficit remains invisible on current GDP-type measurements.

There have been several attempts to develop new indicators to replace – or, rather, redefine – GDP: ones that would register economic success, human wellbeing and environmental sustainability on a single inter-related scale. But until such an indicator gains broad acceptance from at least a core group of key states and is given teeth by a binding international treaty on environmental sustainability, Rio+20 is doomed, like its predecessors, to amount to pious, ineffective blather.

Perhaps, however, we may take heart from the Summit for Sustainability in Africa that took place in Botswana last month. “We need,” said the Botswanan president, Ian Khama, “to take stock and attach value to our natural resources and ecosystems such that we may include their value in planning and decision- making processes as well as in our national accounts and balance sheets.” With luck the powerful leaders who are gathering in Rio next week will take a leaf out of Khama’s book.