Habitat destruction costing the earth $250 billion a year

Posted: 24 August 2002

Habitat destruction continues unabated throughout the world, but mounting evidence suggests that this trend is costing the world around $250 billion each year - and every year into the future - warns a report in Science.

From tropical forests to ocean reef systems, about half of an ecosystem's total economic value is lost when that ecosystem is converted from its wild state for human use such as cropland or housing, according to the report.

As the Philippines moves towards industrial-isation trees are extensively felled.© Chris Stowers/Panos PicturesScientists estimate that a network of global nature reserves would ensure the delivery of goods and services worth at least $400 trillion more each year than the goods and services from their converted counterparts. "There is at least a 100 to one global benefit cost ratio to maintaining wild nature instead of developing it," said Robert Costanza, and ecological economist at the University of Maryland and an author of the Science study.

"The economics are absolutely stark. We thought that the numbers would favor conservation, but not by this much," said lead author Andrew Balmford of the University of Cambridge Zoology Department.

Balmford and colleagues compared the difference in the value of economic benefits provided by relatively intact ecosystems and by converted versions of those ecosystems. Although they reviewed more than 300 case studies of such conversion, they only identified five examples that met their rigorous standards for comparing benefits.

Habitat value

The economic value of an ecosystem can be measured in terms of the "goods and services" - including climate regulation, water filtration, soil formation, and sustainably harvested plants and animals - that the ecosystem provides. Pricing these goods and services is difficult, since they include items that are not bought and sold as part of a market driven, conventional economy. Economists assign values to non-marketed services using a range of techniques, from estimating the cost of replacing these products to assessing how much individuals and nations would be willing to pay for each ecosystem service.

In the study, Balmford and his team analysed the case of a tropical forest in Cameroon converted to small scale agriculture and commercial plantations, another of a mangrove system in Thailand converted for shrimp farming, and another case of a Philippine coral reef dynamited for fishing.

In each case, the loss of ecosystem services such as storm and flood protection, atmospheric carbon sinks, sustainable hunting, and tourism outweighed the marketed benefits that came with conversion.

The total economic value of the intact ecosystems ranged from 14 per cent to almost 75 per cent higher than the converted ecosystem values.

Costanza was one of the first scientists to draw attention to the concept of estimating dollar values for natural habitat. He and a team of researchers estimated in 1997 that the average global value of wild nature was $33 trillion a year. However, natural systems are changing from their intact state at a rate of 1.2 per cent per year, or 11.4 per cent in the decade since the last sustainable development summit in Rio de Janeiro.

Environmental incentives

Lack of information about the economic worth of ecosystem services, the failure of markets to capture and value these services, and tax incentives and subsidies that encourage land conversion all contribute to continued habitat destruction, say the authors.

Researchers and policy makers are exploring several different ways to bring nature into the marketplace, Balmford said. Devices such as carbon taxes and credits, premium prices for certified, eco-friendly products, and even direct payments to the communities that live in globally significant conservation areas are under consideration.

The study estimates that by spending about $45 billion a year to conserve natural habitat on land and in the oceans, the net return on the services produced by nature would be between $400 and $520 trillion. About $6.5 billion is now spent to sustain natural areas around the globe. Half of that is shelled out by the United States.

"We have to keep track of our natural capital. We've been liquidating it and not including the costs in our calculations," Costanza said. "The environment and the economy are tightly interdependent."