Destruction of nature threatens the world economy: time to outlaw it as a serious financial crime.
This article by our friend Midori Paxton, head of ecosystems and biodiversity at the United Nations Development Programme (UNDP), first appeared in Fortune Magazine, April 21, 2023 and is reprinted with permission. Read the original here.
View of a tree in a deforested area in the middle of the Amazon jungle seen during an overflight by Greenpeace activists over areas of illegal exploitation of timber in 2014. Photo: Raphael Alves - AFP - Getty Images
From extinctions to deforestation, humanity is paying the ultimate price for allowing the global economy to undervalue nature and natural resources.
Not only has the world been underinvesting in protecting biodiversity for too long, but many economic activities are also actively damaging it, something which should be considered wholesale theft of valuable shared assets.
The destruction of nature defrauds countries and society, jeopardizing the resources that currently generate around half of the global GDP, or an estimated $44 trillion. The impact of losing wild pollinators, marine fisheries, and timber from tropical forests—just a fraction of ecosystem services—could reduce global GDP by an estimated $2.7 trillion annually by 2030.
The economics of our current relationship with nature is bleak. The seminal Dasgupta report on the economics of biodiversity found that our demands on nature now exceed nature’s capacity to supply them, putting biodiversity under huge pressure, and future generations at “extreme risk.”
To maximize deterrents against abusing nature and recognize its costly consequences, countries must urgently outlaw the destruction and degradation of nature. Prosecuting the theft of natural capital as we would any other financial crime would force a global rethink in how nature is valued, grounded in legal and economic accountability that acknowledges healthy ecosystems as a cornerstone of our collective well-being.
As a starting point, the definition of natural asset classes, such as land, must be expanded to include ecosystem services beyond the “owner” of the land asset to capture its wider impact on all stakeholders. Considering nature—and all its diverse ecosystem services that fall under an organization’s responsible management—an asset class alongside real estate, cash, bonds, and equity would help embed environmental degradation and biodiversity loss as a material risk to businesses and investments. At the same time, it would position nature as an appreciating asset if protected and sustainably managed. Legal interests, if extended beyond the “owner” of the land, could include all parties with an interest in the preservation of its value, including future generations.
Doing so would hold those causing harm to a higher account and increase the legal incentives for protecting nature. Incorporating nature fully as an asset class would also sen