Economy neglects nature's value: Prominent economist proposes a solution for this oversight
Partha Dasgupta, an economist at the University of Cambridge, has written a thought-provoking book titled "On Natural Capital: The Value of the World Around Us." In this book, Dasgupta argues that nature is underpriced, a fundamental problem facing the global economy.
Dasgupta believes that the demands on nature have been over-extended, and he calls for a re-evaluation of how we price and value the natural world. He suggests that costs should be determined by the social value nature provides, and pricing should be adjusted to help rebalance nature.
One of the key areas Dasgupta discusses is the role of regulators and policymakers in pricing nature. He argues that they should spend time with ecologists to better understand disclosures and reporting related to nature. Capital markets, he points out, do not price in the use of nature, considering water systems and the atmosphere to be free.
Dasgupta proposes the creation of international institutions focused on ocean governance, including a global body to oversee ocean resources and implement better pricing models that reflect the true value and scarcity of marine ecosystems. He has long argued for an international institution to manage the oceans, as they are an open-access resource that are not accurately accounted for in pricing models.
Another proposal from Dasgupta is the compensation of countries with tropical rainforests for not deforesting. This concept is explored through the Tropical Forest Finance Facility. He also advocates for mandatory disclosures in financial markets to provide information missing from current pricing models, as nature is not included in these models.
The destruction of natural habitats, such as the loss of coastal lands and forests, are examples of the over-extension of demands on nature. Talking about biodiversity and the loss of species, according to Dasgupta, is more convincing than talking about weather patterns when discussing the impact on the natural world.
Interestingly, Dasgupta is not a fan of discussing climate change with critics, as people do not understand or connect with the abstract idea. Instead, he finds it more effective to focus on the tangible impacts of nature's degradation.
It's worth noting that the publication date of Dasgupta's book, "On Natural Capital: The Value of the World Around Us," is not provided in the text. However, the book is published by Witness Books.
In conclusion, Dasgupta's book provides a compelling argument for the need to re-evaluate our relationship with nature and the way we price and value it in the global economy. By understanding and addressing the undervaluation of nature, we can work towards a more sustainable and equitable future.
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