Report makes the business case for governments to protect biodiversity

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This topic will be discussed at the Global Landscapes Forum Luxembourg on 30 November.

Scientists have warned that biodiversity losses due to climate change could result in perilous drops in crop and fish yields, threatening food security; violent, damaging floods and other natural disasters; and even the loss of potentially valuable new medicines. Already, crop pollination, natural water purification, flood protection, carbon sequestration and other benefits that biodiverse ecosystems provide – known as “ecosystem services” – have been on the decline.

A recent, sweeping report by the Organisation for Economic Co-operation and Development (OECD) sets out an economic and business case for “transformative change, because mere changes at the margin will not be sufficient to address biodiversity loss,” says Katia Karousakis, biodiversity programme leader at the OECD Environment Directorate and lead author of the report.

The report shows that costs of “business-as-usual” are high and growing. Land-cover change has cost some USD 4 trillion to 20 trillion per year in ecosystem services, on top of an estimated USD 6 trillion to 11 trillion per year from land degradation. Meanwhile, ecosystem services derived from biodiversity provide annual benefits valued at between USD 125 trillion and 140 trillion – more than one-and-a-half times global gross domestic product (GDP).

The report shows how governments can change tax systems, credits, permits and other economic instruments to create “incentives for more sustainable production and consumption patterns, and can also generate much needed revenue” to protect biodiversity, says the report. At the same time, the report calls for subsidies that are harmful to biodiversity, such as many in the fossil fuel and agricultural industries, to be reformed.

Revenues from biodiversity-relevant taxes amounted to just over 1 percent of all environmentally-related taxes in OECD countries. As such, there is “substantial potential” to increase their use and ambition, which may include levies on pesticides, fertilizers, forest products and timber harvests.

Denmark offers one example of a tax earmarked to help protect biodiversity: all tax revenues from pesticides  – USD 78.1 million in 2016 – are set aside for environmental purposes and to compensate farmers. In France, part of the tax revenues from pesticides are earmarked to fund the Ecophyto I and II plans to reduce pesticides and harmful chemicals, with the rest going to water agencies, says the OECD in a related report.

Some 169 different fees and charges for biodiversity work have been reported in 42 countries, and biodiversity-relevant tradable permit programs are increasing, with 38 permits currently active in 26 countries. These include the auction of Rocky Mountain bighorn sheep-hunting licenses in the Canadian province of Alberta, with at least 60 percent of proceeds to be designated for long-term projects that benefit sheep. Similar auctions exist in Baja California, Mexico, and the auctioning of hunting permits is also common in the U.S..

The OECD urges policymakers to encourage the gathering, sharing and analysis of data related to biodiversity to support fact-based policy decisions. “A suite of targets that are more specific and more measurable” is critically important, says Karousakis, and will be addressed during the Convention on Biological Diversity (CBD) meetings in Kunming, China in 2020.

Some large international firms are beginning to measure and publicly report on their impacts on biodiversity. The luxury group Kering, which owns such brands as Gucci and Bottega Veneta, estimated the 2017 environmental impacts of its activities at 482 million euros.

The restoration and conservation of biodiversity can also offer new economic and business opportunities in such areas as organic food and beverage production, ecotourism, sustainable forest management, and sustainable seafood and biopharma.

“It’s very, very clear that the more we lose biodiversity, including our natural forests, wetlands, coral reefs, and other species and ecosystems, the higher the costs to our economies and to human well-being,” says Karousakis. “The urgency is here, now, and the longer we wait, the greater the costs of inaction will be.”