Bringing the Dismal Science to Life: Economics in a Post-2020 World
The Earth is on track to lose 38-46% of its biodiversity by 2050. Agriculture, forestry, fisheries, infrastructure and human encroachment have caused widespread ecosystem loss and fragmentation. These economic activities have been some of the main drivers of biodiversity loss to date. By 2050, it is predicted that only 10% of the Earth’s land will be free of human impacts.
The Convention on Biological Diversity (CBD) was designed to promote the conservation, sustainable use and equitable sharing of benefits of biological diversity, including through the adoption of the Aichi targets in the Convention’s 2010-2020 plan. Yet, progress on the targets has been limited. This is troubling given that the targets play a vital role in the SDGs and in sustainable development.
We understand the problem clearly. Biodiversity depends on intact ecosystems, and ecosystems are declining due to economic activity. We must restore ecosystems to preserve biodiversity and achieve sustainable development. The question is how, such that biodiversity will flourish by 2050?
Some will argue that to save biodiversity we must stop economic development, but that is both unrealistic and unnecessary. Biodiversity underpins the provision of ecosystem services and economic well-being, and its preservation is key to achieving several development goals, including hunger and poverty alleviation. Although conservation actions such as establishing protected areas have helped to protect biodiversity, they have not yet been sufficient to prevent its continuing decline or the consequent loss of benefits from biodiversity to people.
Instead, we must make ecosystem conservation and restoration a vital part of economic development. In order to do so, the first priority is to properly account for and value the contribution that biodiversity makes to human society. This includes the role of ecosystems as a natural solution for closing the global infrastructure finance gap. This is the strength of the natural capital approach. It recognizes nature as an asset with value – like labour or machines – and provides methods for reflecting that value into economic decision making.
Structuring the post-2020 biodiversity framework
We suggest that the post-2020 biodiversity framework take as a guiding principle that biodiversity conservation and restoration at scale must occur in the context of mainstream economic activity. Other means for protecting biodiversity have not been enough and will fall short of the 2050 Vision.
As such, the biodiversity targets and indicators must be set in a way that is integrated with multiple environmental, economic and social objectives. A single, coherent indicators framework will reveal the multiple benefits of preserving and enhancing natural capital for sustainable economic development. This will require a comprehensive review of indicators frameworks, including those used by economic line ministries such as ministries of finance and development.
While the SDGs provide a clear starting point for this review, other frameworks such as the System of Environmental-Economic Accounting (SEEA) Experimental Ecosystem Accounting (EEA) – which underlies Aichi Target 2 – and the green growth or inclusive wealth indicators of GGKP partner organizations including the Global Green Growth Institute, OECD, UN Environment and World Bank, are important to review in pursuit of the 2050 Vision. The framework must also align, where relevant, with indicators used by the business and finance communities. The GGKP Natural Capital Expert Working Group is currently assessing related indicator frameworks and data sources and offers to share lessons learned with the CBD Secretariat in structuring the post-2020 biodiversity framework.
In addition, the indicators framework should suggest clear, actionable and measurable responses by countries to achieving the targets. It must be practical for in-country application, particularly in jurisdictions with limited ministerial or statistical capacities. The GGKP working group is conducting a further assessment of sustainable economic policy frameworks that will be useful for ensuring that the post-2020 biodiversity framework is strongly supported in the national advisory work of major international organizations.
Financing biodiversity restoration post-2020
Linking the post-2020 biodiversity framework to mainstream economic policymaking aims to make biodiversity conservation and restoration a part of the “business-as-usual” scenario, rather than an externality to it. In such a case, normal market activity would ensure that the protection and restoration of biodiversity was fully funded. Recognizing that we are still far from achieving that goal, the next best scenario is to increase conservation funding, both domestically and internationally, publicly and privately, to support activities aimed at implementing the post-2020 biodiversity framework.
The GGKP partner organizations support a large number of national projects, including those focused on landscape restoration and policy support. With an integrated indicators framework aimed at practical, in-country application, particularly where data is readily available, the post-2020 biodiversity framework will speak to a broad range of international actors. By aligning those actors around a common framework and more manageable set of integrated targets, we expect resource mobilization efforts to be streamlined and international aid funds to go further. An integrated framework would also facilitate the development and implementation of a broad and effective international agreement for the post-2020 biodiversity framework.
In order to bring natural capital into the mainstream of green growth policy and practice, the GGKP in partnership with the MAVA Foundation launched the Natural Capital Expert Working Group at the World Bank in Washington, DC, USA in November 2017. The group aims to influence mainstream economic decision makers to value and account for natural capital in economic planning. This blog post has benefitted from the comments and additions of some working group members.
About the GGKP Natural Capital Expert Working Group
The GGKP Working Group on Natural Capital explores state-of-the-art methods, models, data and tools to achieve its three goals of pushing forward the knowledge frontier around natural capital and green growth; mainstreaming natural capital in global green growth activities; and supporting stronger implementation of natural capital commitments in national economic plans. The group is comprised of 24 experts from across GGKP’s partner institutions, each with at least 10 years of experience working with natural capital.
For more information, please see About the Natural Capital Working Group.
Why Natural Capital?
A number of countries have taken up green economy or green growth action plans in recent years, but only a handful have included significant considerations of the role of natural capital in those plans. Given the critical role that natural capital stocks and ecosystem services play in maintaining biodiversity and enabling green growth, bringing natural capital into national development action plans now and into the future, will help make an important contribution to achieving the Sustainable Development Goals by 2030.
For the latest knowledge, data, policy guidance and expert insight on natural capital, visit the GGKP theme page on Natural Capital.
Economics for Nature
The GGKP Working Group on Natural Capital was established in the context of the Economics for Nature programme, a six-year initiative focused on ensuring that nature has a voice in economic and planning processes. The GGKP is part of the core team alongside the Green Economy Coalition (GEC), The Scottish Wildlife Trust, and Finance Watch.
The MAVA Foundation, a Swiss-based philanthropic organization, has made the mainstreaming of natural capital into national development plans a key focus of its strategic programme for 2017-2022. It has committed to supporting the working group for five years.
For more information, please visit the Economics for Nature webpage.
The opinions expressed herein are solely those of the authors and do not necessarily reflect the official views of the GGKP or its Partners.