Nature must be a fundamental part of the Economy

I have read with deep interest a document by Professor Sir Partha Dasgupta of the University of Cambridge, in which he reflects on what must be fundamental to Economics, and refers to Nature.

According to Dasgupta, the economy has always been based on measuring the GDP of countries and the mistake has been made of never taking into account the depreciation of assets that nature represents, such as the degradation of the biosphere.

Nature is our most precious “asset” and humans have scorned and mismanaged this as something with “no value at all.”

Our demands on nature exceed its ability to supply us with the “goods and services” that we need from it: water, fertile land, clean air, soil regeneration, insects that pollinate our crops, etc….

At present and with our way of life, it is estimated that we consume 1.6 times what the Earth is capable of generating, and therefore it is degraded by leaps and bounds. And we can see the results if we look a little at what is happening around us, and the Covid-19 has been the penultimate warning of what is heading towards us.

Using economic terms, in the last 30 years the capital produced per person has doubled, but instead the “stock” of natural capital per person has decreased by 40%.

And approximate calculations indicate that the cost to correct the damage we do to Nature is of the order of 6 trillion per year.

The 600-page Report presented by Professor Dasgupta indicates the urgency of transformative actions to change the course of the current situation.

The first and fundamental is that we must ensure that our demands on nature do not exceed what it can supply us.

Therefore we have to increase our supplies with natural resources, and he suggests that we put biodiversity at the center of the economy, as indicated in the previous photo.

The second is that we must use other measures of economic success.

Only GDP is useless, and we must consider other measures of “inclusive” wealth, valuing the natural capital we have and seeing how it increases.

And finally Dasgupta calls for the transformation of our systems and institutions, especially the economy and education, to be able to generate the changes that are needed for future generations.

In his Review, Dasgupta provides clear directions for international relations and for richer countries to help poorer ones to maintain vital ecosystems.

He suggests the payment of “rents” and other financial means, because it is clear that each country cannot cope with this situation separately, least of all the poorest.

Will world leaders read this Report with the importance it has, and more importantly, will they take the actions that lead to change the current situation?

It remains to be seen.