Biodiversity: The costs of inaction

Degrading our natural environment brings considerable costs for society. Yet few realise just how closely biodiversity and healthy ecosystems are linked to our prosperity and well-being.

We take nature’s services for granted. In Europe, crop pollination is worth more than €14bn annually. Wetlands provide an estimated €6bln in ecosystem services each year. These benefits are provided with minimal upfront investment, representing a “free” service from nature.

Water, air, soil, biodiversity, landscape and other assets form a natural capital from which we can derive goods and services. It brings us food security and clean air and drinking water, raw materials for industry, ingredients for medicine, protection from natural disasters and mitigation against the effects of climate change.

All this has traditionally been ignored in modern economics which focus on GDP growth as the measure of progress. However accounting for natural capital can be an important guide to strengthen policy and inform decision making. Ultimately, it could help us ensure Europe’s long-term economic and environmental prosperity.

Natural capital does not slot easily into the paradigms of traditional market-based economies. Some would even argue it should not be considered as an extension of economics at all, since that risks underestimating the intrinsic value of nature, which goes far beyond any monetary worth. Even with these concerns in mind, putting an economic value on nature allows us to factor natural capital into political and business decisions. The EU 2020 Biodiversity Strategy recognises this and calls for the valuation of ecosystems and their services.

Europe’s biodiversity is in rapid decline and our ecosystems are being consistently degraded. A quarter of European species are currently threatened with extinction due to habitat loss, urban expansion, agriculture and climate change, according to the European Red List of Threatened Species drawn up by the International Union for Conservation of Nature, and the trend is accelerating at an alarming rate. Economists estimate the loss of biodiversity in Europe costs the EU around 3% of GDP per year and global biodiversity loss is valued at around €50bn.

Despite that, the EU is again on course to miss its 2020 target for “halting the loss of biodiversity and the degradation of ecosystem services in the EU, and restoring them in so far as feasible.”

Poor implementation at national level is to blame, rather than policy inaction at European level. The EU’s so-called “Nature Directives” – the Directives on birds and habitats – are the cornerstone of EU nature conservation and are prime examples of effective, flexible and popular environmental legislation.

Thanks to the Nature Directives, we have seen spectacular comebacks of many iconic species, and an expansion of the EU’s unique Natura 2000 network of protected areas, which now protects 18% of land and 4% of marine waters.

Not only do these areas help to ensure the long-term survival of Europe’s most valuable species, they also provide valuable ecosystem services. In Berlin, for example, 23,000 hectares of protected urban landscape and green areas supply enough clean water for all the city’s 3.5m inhabitants, a service worth more than €16.7m every year. Overall, managing the Natura 2000 network N requires an investment of around €5.8bn per year, but it generates €200bn to €300bn per year in economic benefits, according to European Commission figures.

Ensuring more effective implementation of EU Nature Directives at national and regional level, and placing greater importance on the value of our natural capital would have considerable benefits for biodiversity, sustainable economic development and Europe’s prosperity.

Acting to conserve our natural environment is clearly a worthwhile investment and should never be thought of as a “cost.” Failure to act would, however, come with a significant price tag for the economy and society. Knowing this, we must ask ourselves: what are we waiting for?