Can we capture the moment and change our relationship with nature and wealth? The Dasgupta Review on the economics of biodiversity calls for change in how we value nature and measure economic success. Minna Hartikainen discusses what it takes to turn transformative economic thinking into meaningful political and financial action ahead of the Spring Budget 2021.

What’s different this time?

Environmental economics is not new. A decade ago The Economics of Ecosystems & Biodiversity (TEEB 2010) attracted widespread attention, as well as criticism about its concept and calculations. The idea of “putting a price on nature” continues to divide opinion, even if the economic value of ecosystem services is increasingly guiding economic decision making and government policy. The Dasgupta Review on the economics of biodiversity (2021) no longer attempts to put absolute monetary values to nature but makes the case for changing our relationship with nature and how we measure wealth.

The Dasgupta Review is a synthesises of economic and ecological thinking but also a call for radical change to the economic system. It has been commissioned by the UK Treasury, which sends a powerful message across the world. The review also builds consensus among economists and environmentalists by acknowledging the need to save nature for our health, wellbeing and economies as well as for its own sake. Could the momentum to “build back better” from the pandemic lift this review off the ground? At least it is arriving at a time when people and nations are more aware of the importance of nature to global health and personal wellbeing.

"It's not easy being green" slogan in an environmental demonstration

Good economics require good ecology

The Dasgupta Review’s headline messages are clear: Nature needs to be embedded in the economy. Our economies, livelihoods and wellbeing depend on it. However, our unsustainable relationship with nature is putting the prosperity of future generations at risk. We need urgent changes to the whole economic system, from production and consumption to finance and education, to balance the needs of people and nature now and in the future.

There is not an endless amount of land, so we need to make choices between difference ecosystem services: from food and timber to pollination and environmental resilience from biodiverse nature. Bateman and Mace (2020) propose a natural capital framework for decision-making that links ecological and economic perspectives. The NCI recommends wholescape thinking and the Royal Society talks about multifunctional land use for better environmental management. Debates remain around land sparing vs. land sharing, restoration or rewilding, nature-based solutions and different approaches based on planetary boundaries, sustainable development or technological revolution, but the Dasgupta Review builds a broad church to accommodate most views.

Hot takes

Protecting nature now is much cheaper than restoring it later. Sir Partha Dasgupta is clear that we should not let perfection be the enemy of good. National natural capital accounts are limited but we have enough information to act now. It’s much better to work with the data we have, while continuing to develop the ways in which we measure it over time, than to ignore our natural wealth altogether.

The NCI discussed options for change in a recent talk and Q&A with Dr Ruth Waters from the Dasgupta Review team. Many solutions tackle institutional failures – such as better management of protected areas or planning with biodiversity net gain – but some are personal too. We need to shift socially embedded preferences to change consumptions patterns, diets and the culture of waste. Businesses have an important role to play too. The review shows the economic flows from ecosystem functions all the way to finance decisions. Now we need to make the case more broadly to build support across the society for the necessary political and financial decisions.

Making money talk

The Prime Minister participated in the Dasgupta Review launch and the response from across the sectors has been mostly positive. Yet there has also been those who have criticised that the review doesn’t go far enough to give policy recommendations and seek engagement with the Government. In the launch, we heard the PM accept the baton and reiterate his commitment to building back greener, but the Chancellor has yet to comment on the review. The Spring Budget would be an unprecedented opportunity to reset large areas of the economy but so far there has been more talk about fuel duties and sin taxes than the promised green industrial revolution.

While we wait for the Chancellor’s response, there are other political opportunities to embed the Dasgupta Review’s thinking into a global green recovery. In addition to the UN biodiversity and climate conference hosted by the UK, the UK is hosting the G7 summit in June with an emphasis on building back better, tackling climate change and preserving biodiversity. Ultimately, embedding nature in the UK economy means a big shift in economic thinking. It requires bold action across government departments and policies, both nationally and internationally, from national environmental legislation to international trade deals.

Watch ecologist Dr Ruth Waters discuss the Dasgupta Review in our recent event.