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Putting a Price on Nature: The Economics of Ecosystems and Biodiversity

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Type: Journal Article
Author: Sukhdev, Pavan
Journal: Solutions
Volume: 1
Page(s): 34-43
Date: 2010
URI: https://hdl.handle.net/10535/8370
Sector: General & Multiple Resources
Subject(s): ecosystems
environmental protection
Abstract: "The Economics of Ecosystems and Biodiversity, or TEEB, was conceived at the meeting of environment ministers in Potsdam in 2007. Its goal is to end the economic invisibility of nature--to help stakeholders and beneficiaries recognize the value of ecosystem services, those benefits that nature provides to the human economy, and to reward responsible custodians of Earths ecosystems and biodiversity. Under-standing the problem of biodiversity loss in its complex social, economic, and policy dimensions is a necessary prerequisite for any proposed solution, and this also underpins the guiding philosophy of TEEB. Drawing from this approach, TEEB suggests several steps that can help reduce the loss of ecosystem services, while recognizing the extent to which biodiversity policy and development policy are interlinked. Better management needs good measurement, so we argue for improved metrics at a national level. The inclusion of ecosystem services in the UN Statistics divisions national accounting guidance would be a positive step in that direction. We encourage reporting and disclosure of subsidies and gradual reduction and removal of perverse subsidies. We argue in favor of evaluating and recognizing the real economics of conservation, including its relevance for climate change and its effects on society. We emphasize valuing public services provided by natural areas as part of the decision-making apparatus for public policy and evidence its increasing use in setting up equitable payment mechanisms to reward responsible management by stakeholders and custodians. Protected areas should be primary components of an ecosystem-based strategy to combat the impacts of climate change on vulnerable communities. Last but not least, the improvement of environmental regulation has an overarching and important role. Two basic principles can guide regulatory changes to reduce losses to society: (1) Make the polluter, rather than society, pay, using instruments such as standards, noncompliance fees and fines, compensation payment requirements, pollution taxes, and product taxes on pesticides and fertilizers. (2) Use the full-cost recovery principle, which ensures that all of the costs of services, such as water supply or timber, are assigned to the corporation or the consumer that benefits from the service."

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