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The Economics of Ecosystems and Biodiversity (TEEB)

Economic report into biodiversity crisis reveals price of consuming the planet

Species losses around the world could really cost us the Earth with food shortages, floods and expensive clean up costs

…The study – called The Economics of Ecosystems and Biodiversity (TEEB) shows that on average one-third of Earth's habitats have been damaged by humans – with, for example, 85% of seas and oceans and more than 70% of Mediterranean shrubland affected. It also warns that in spite of growing awareness of the danger of natural destruction it will "still continue on a large scale".

Following an interim report last year, the study group will publish its final findings this summer, in advance of the global Convention On Biological Diversity conference in Japan in October, marking 2010 as the International Year of Biodiversity.

Based on a host of academic and expert studies, the TEEB report is expected to say that the ratio of costs of conserving ecosystems or biodiversity to the benefits of doing so range from 10:1 to 100:1. "Our studies found ranges of 1:10, 1:25, 1:60 and 1 to almost 100 in the case of," said Sukhdev. "The point is they are all big ratios: I'd do business on those ratios...I'm fine with 1:10."

"The earth and its thin surface is our only home, and there's a lot that comes to us from biodiversity and ecosystems: we get food, fuel, fibre; we get the ability to have clean air and fresh water; we get a stable micro-climate where we live; if we wander into forests and wildernesses we get enjoyment, we get recreation, we get spiritual sustenance; all kinds of things – which in many cases are received free, and I think that's perhaps the nub of the problem," said Sukhdev …

"We fail to recognise the extent to which we are dependent on natural ecosystems, and not just for goods and services, but also for the stability of the environment in which we survive - there's an element of resilience that's been built into our lives, the ability of our environment to withstand the shocks to which we expose it...the more we lose, the less resilience there is to these shocks, and therefore we increase the risk to society and risk to life and livelihoods and the economy,"

…The final reports, in five sections covering the economic methods and advice to policy makers, administrators, businesses and citizens, will make a series of recommendations for how to use economic values for different parts of nature, such as particular forests, wetlands, ocean habitats like coral reefs or individual species (one example given is paying farmers to tolerate geese wintering in Scotland), into ways to protect them.

One of the most immediate changes could be reform of direct and indirect subsidies, such as tax exemptions, which encourage over-production even when there is clear destruction of the long-term ability of the environment to provide what is needed, and below-cost pricing which leads to wasteful use and poor understanding of the value of the products. "Particularly worrying" are about $300bn of subsidies to agriculture and fishing; subsidies of $500bn for energy, $238-$306bn for transport and $67bn for water companies are also singled out.

…Other suggested reforms include stricter limits on extraction and pollution; other environmental regulations such as restrictions on fishing net sizes or more damaging agricultural practices; higher penalties for breaking the limits, reform of taxes to encourage better practices; better public procurement; public funds for restoring damaged ecosystems such as reedbeds or heathlands; forcing companies that want to develop an area of land to restore or conserve another piece of land to "offset" the damage; and paying communities for the use of goods and services from nature – such as the proposed Redd international forestry protection scheme. Money raised by some policies could pay for others, says the report.

Sukhdev's team also wants companies and countries to adopt new accounting systems so alongside their financial accounts of income, spending, profits and capital, they also publish figures showing their combined impact on environmental or natural capital, and also social capital, such improvements in workers' skills or national education levels.

"We're in a society where more is better, where we tend to reward more production and more consumption... GDP tends to get associated with progress, and that's not necessarily the case."