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The Value of Nature

UN Conference Divided over How to Protect Biodiversity

Friday marks the last day of the UN biodiversity conference in Bonn and delegates are still haggling over the closing statement. Although progress has been made on issues such as establishing protected areas, concrete results are likely to be limited.

How much money is nature worth? It's a question that economists and environmentalists have been pondering for decades in a bid to leverage market mechanisms to protect the environment.

Now experts are one step closer to answering that question after Deutsche Bank economist Pavan Sukhdev, who was charged by the European Commission and the German government to measure the value of nature, presented the preliminary results of his research at the United Nations biodiversity conference in the German city of Bonn Thursday.

According to Sukhdev's report, deforestation, should it continue at current levels, would mean the world's gross domestic product would be some 6 percent -- or €2 trillion ($3.1 trillion) -- lower by 2050 than it would be were forests preserved. Not only does deforestation mean a forest can no longer produce economic goods, he explained, but it also increases the pace of climate change and puts areas at greater risk of flooding, all of which mean additional costs. The poor would bear a disproportional share of the costs, he said.

A global system to protect all ecosystems would cost around $45 billion annually to build up and maintain, Sukhdev explained. But the returns from such a scheme would be in the range of $4.4 trillion to $5.2 trillion -- meaning that every dollar invested would be repaid 100-fold.

Sukhdev also analyzed the economic costs and benefits of protecting the oceans. Expanding protected areas in the sea to 20 percent of the total surface would cost commercial fisheries $270 million per year in losses. However in the long term, preventing over-fishing through such reserves would secure fishing incomes in the region of $70 billion to $80 billion per year. If no action is taken, the collapse of fish stocks due to over-fishing would cost up to $100 billion and mean the loss of 27 million jobs.

Although concrete numbers were few, the message was clear. "We are still struggling to find the value of nature," Sukhdev told the conference. "This lack of valuation is, we are discovering, an underlying cause for the degradation of ecosystems and the loss of biodiversity." He feels that a new approach to thinking about nature was required, saying that the world's "economic compass" needed to be re-oriented.

German Environment Minister Sigmar Gabriel explained that unfortunately more money could still be made by destroying rather than protecting nature. "Protecting nature needs to bring returns," he said. "We do not have these returns today."

Gabriel is convinced the economic approach is the right one. "In a few years, this debate will perhaps be the most important contribution to protecting biodiversity," he said. Gabriel also wants to get the private sector on board to help protect biodiversity. His Environment Ministry has launched a "Business and Biodiversity" initiative which so far has the participation of 34 companies from around the world.

However not all environmentalists are convinced that the economic approach is the right one. "The monetarization of nature is no silver bullet," warned Jörg Roos, a conservation expert with the influential environmental organization WWF. "If, at the end of the day, only those (species) are protected which earn money, that would be fatal."

Down to the Wire

The UN biodiversity conference is scheduled to finish Friday after nearly two weeks of talks attended by representatives from 191 countries. On Friday morning, it looked like the concrete results of the conference would be limited.

"This is crunch time," said WWF head James Leape. "Everything depends on what comes out at the end of the day."

Among the major issues under debate is the creation of protected rainforest reserves. Rainforests contain around 80 percent of all known species and are therefore crucial to ensuring biodiversity.

German Chancellor Angela Merkel, who has been a high-profile supporter of environmental goals, pledged this week that Germany would make an extra €500 million available to protect forests in the period 2009 to 2012. As of 2013, Germany will make €500 million available each year.

The money would be used to compensate developing countries for preserving rainforest reserves. Norway has also pledged funds but few other industrialized countries have yet put their support behind the scheme. However UN spokesman David Ainsworth said Friday that Merkel's financial pledge had given the negotiations about protected areas an important push forward.

Germany has also put forward an initiative to set up an Internet-based "Life Web," which would enable poorer countries who are seeking funding to establish and manage conservation areas to coordinate with possible donors.

Conference participants are divided over what kinds of forest exploitation is acceptable. Countries such as Malaysia and Brazil -- home to huge swathes of rainforest -- regard regulations imposed from outside as an attack on their sovereignty and are likely to veto any attempts at introducing definitive rules.

The cultivation of biofuels is also a controversial topic at the conference. Biofuels were previously touted as a possible solution to climate change but have recently been the target of criticism due to their role in driving up food prices and damaging the environment. The conference is likely to conclude that international guidelines are needed for the cultivation of biofuels without specifying what those guidelines should be. A certification regime for applying possible standards is also on the table but is unlikely to be approved.

However the conference is reported to have made progress on establishing protected areas at sea. Delegates may be able to agree on criteria for choosing areas to protect, sources at the conference told the news agency DPA.

The conference has also agreed on a road map for further negotiations about access to genetic resources and the fair compensation of the benefits of their exploitation, an approach known as Access and Benefit Sharing (ABS). Western pharmaceutical companies often develop products using genetic resources from tropical areas rich in biodiversity but developing countries sometimes accuse them of exploitation if companies patent indigenous remedies without paying the countries where those resources originate.

The conference is due to agree on a final text before the conference closes Friday. However UN spokesman David Ainsworth told journalists on Friday morning there were still a number of "sticking points" to be resolved before the text could be finalized.

The aim of the Bonn conference is to discuss how to implement the UN Convention on Biological Diversity (CBD), which came into force in 1993, in a bid to slow the extinction rate of species and the destruction of the world's ecosystems. Environmentalists say that the loss of biodiversity poses a threat to human survival comparable to that of climate change. The next conference will take place in Japan in two years' time.

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