Why the Travel Industry Needs to Pay Attention to The Economics of Biodiversity
A ground-breaking paper highlighting the need to embed nature’s value in our economic systems and echoing The Long Run’s mission was published last week. The Dasgupta Review is an independent, global review on the Economics of Biodiversity led by Professor Sir Partha Dasgupta and commissioned by HM Treasury in 2019.
The report opens: ‘Our economies, livelihoods and well-being all depend on our most precious asset: Nature.’ Of course, we wholeheartedly agree. The entire Long Run mission stems from this fact; the sustainable, long-term protection of ecosystems is the most urgent priority of our time. For tourism to be regenerative, nature must be recognised as a precious asset.
Our Managing Director, Delphine Malleret-King, comments, “This report captures the fundamental mind shift needed for society to step up to our climate and biodiversity emergency. Climate is often top of mind because it can be narrowed down to carbon and therefore people feel more in control. They have a metric, and it appears simple. But we need biodiversity and all its complexity top of mind, too.”
“People must understand that nature is not a project; it’s our life support system. No nature, and no economy, business, nor life. Natural and social capital are assets that can no longer be ignored. This is what Long Run members strive to showcase, what we as an organisation strive to facilitate, and what we collectively encourage others to recognise.”
Here we pull out other highlights from the paper and what they mean to us and tourism as a whole:
Biodiversity enables Nature to be productive, resilient and adaptable.
‘Just as diversity within a portfolio of financial assets reduces risk and uncertainty, so diversity within a portfolio of natural assets increases Nature’s resilience to shocks, reducing the risks to Nature’s services. Reduce biodiversity, and Nature and humanity suffer.’
Restoring and regenerating diverse ecosystems so that they can perform their vital functions locally and globally—restoring nature’s balance, defending against extreme weather, providing in the long-term—is crucial. Sustaining life as we know it or minimising our impact is no longer enough, as has been our motto for many years.
There’s another learning here, too. Since conservation is central to The Long Run’s mission, we encourage our members to diversify their income streams to reduce risk. This proved critical and fruitful in 2020. Just as nature needs diversity to be resilient, so do our businesses and conservation missions.
Natural capital needs renewed weight and significance within our business operations and economies.
‘Accumulating produced and human capital at the expense of natural capital is what economic growth and development has come to mean for many people. In other words, while humanity has prospered immensely in recent decades, the ways in which we have achieved such prosperity means that it has come at a devastating cost to Nature.’
Nature needs to be central to business decisions, not a sideliner, and we need to restore balance in how and for what purpose we manage land. The Long Run’s 4C framework (Conservation, Culture, Community and Commerce) helps tourism businesses, private parks, and conservancies recognise the economic, social, cultural, and environmental value of a diverse and flourishing ecosystem. No one C is sustainable without the others.
The need to protect and restore ecosystems is urgent and critical to global equality.
‘Many ecosystems, from tropical forests to coral reefs, have already been degraded beyond repair, or are at imminent risk of ‘tipping points’. These tipping points could have catastrophic consequences for our economies and well-being; and it is costly and difficult, if not impossible, to coax an ecosystem back to health once it has tipped into a new state. Low-income countries, whose economies are more reliant than high-income countries on Nature’s goods and services from within their borders, stand to lose the most.’
If we delay, restoring Nature will become more costly, and in some cases, impossible. We don’t have time to wait for the public sector to take action; everyone has a part to play, including tourism businesses and private parks.
COVID-19 has provided a window into the devastating impacts land-use change, and species exploitation can have. It’s also shown us what life might look like as we accumulate more ‘tipping points’ in nature’s exploitation. Conservation is a social obligation, as much as it is an environmental one.
The solution requires long-term thinking and a shift in our value systems.
‘At the heart of the problem lies deep-rooted, widespread institutional failure. Nature’s worth to society – the true value of the various goods and services it provides – is not reflected in market prices because much of it is open to all at no monetary charge… But this is not simply a market failure: it is a broader institutional failure too. Many of our institutions have proved unfit to manage the externalities. Governments almost everywhere exacerbate the problem by paying people more to exploit Nature than to protect it, and to prioritise unsustainable economic activities. A conservative estimate of the total cost globally of subsidies that damage Nature is around US$4 to 6 trillion per year.’
While we wait for governments and institutions to make a seismic value shift, we can create microcosms of what needs to happen within our own industries and destinations. Tourism is well placed to do this—because it derives profit directly from nature, and the link is more apparent. This is what The Long Run exploits for the benefit of all.
Having worked with pioneers doing this, in some cases for decades, The Long Run knows that long-term thinking is the difference between a responsible operation and a regenerative one. This is mostly why politics and business have failed to deliver to date—short-term thinking is Nature’s greatest enemy.
The review is hopeful that ‘the 15th Conference of the Parties to the Convention on Biological Diversity (COP15) and the 26th Conference of the Parties to the UN Framework Convention on Climate Change (COP26) provide important opportunities to set a new, ambitious direction for the coming decade.’
We need to accept a simple truth: our economies are embedded within Nature, not external to it.
‘The Review’s approach is based firmly in what we know from ecology about how ecosystems function, and how they are affected by economic activity, including the extraction of natural resources for our production and consumption, and the waste we produce through these activities, which ultimately damages ecosystems and undermines their ability to provide the services on which we rely. This approach helps us to understand that the human economy is bounded and reshapes our understanding of what constitutes truly sustainable economic growth and development: accounting fully for the impact of our interactions with Nature and rebalancing our demand with Nature’s capacity to supply.’
Industrialisation and technological prowess have separated us from Nature. We believed (some still do) that we were external to it; this thinking’s natural progression is that we do not need it. To turnaround this entrenched view and modus operandi, we must learn from the past, particularly from indigenous cultures and principles. It is as urgent to listen as it is to act. Travel experiences can, of course, facilitate this.
The type of transformative change needed requires enormous commitment and collaboration.
‘Sustainable economic growth and development require us to take a different path, where our engagements with Nature are not only sustainable but also enhance our collective wealth and well-being and that of our descendants. Choosing a sustainable path will require transformative change, underpinned by levels of ambition, coordination and political will akin to, or even greater than, those of the Marshall Plan.’
This is something we’ve seen in action for ten years at The Long Run, and still, we’re are on a journey. The transformation will only come about if we commit to a complete shift in how we do business and work together to achieve it.
The review states that ‘The change required should be geared towards three broad transitions’ which correlate directly with The Long Run’s 4C model and mission to raise the economic value of protected ecosystems to the betterment of all. It also points directly towards the importance of collaboration. The three broad transitions are:
Conservation and environmental management: ‘Ensure that our demands on Nature do not exceed its supply and that we increase Nature’s supply relative to its current level.’
The review suggests several vital changes in our consumptive relationship with Nature:
- Improving food production.
- Reducing land degradation.
- Reducing waste and introducing circular systems.
- Changing pricing structures and global supply chains.
- Reducing the human population through education and female empowerment.
- Expanding management of protected areas.
- Creating multi-functional landscapes and seascapes.
- Increased investment in Nature-based Solutions and natural capital (which forms the bulk of wealth in low-income countries and alleviates poverty).
Measuring the economic value of ecosystems and biodiversity: ‘Change our measures of economic success to guide us to a more sustainable path.’
Nature needs to enter economic and financial decision-making, and to that, we need to:
- Measure our wealth in terms of all assets, including natural assets, known as ‘inclusive wealth’.
- Introduce natural capital into national accounting systems.
- Standardise data and modelling to make it easier to embed natural capital into national economic systems.
Collaborating at a local, regional and global level: ‘Transform our institutions and systems – particularly our finance and education systems – to enable these changes and sustain them for future generations.’
The review states the need for:
- The pooling of knowledge and perspective among and across different levels of society.
- Nations need to be paid to protect significant ecosystems (e.g. rainforest).
- Impose rents or charges for oceans (or other territories that lie outside national boundaries).
- Establish more international governance of Nature.
- The transformation of financial and education systems to support sustainable engagement with Nature.
- A set of global standards to integrate Nature-related risks and impacts into decision-making.
- Help individuals get closer to and better understand our relationship with nature to demand the societal and governmental change we need.
‘Transformative change is possible – we and our descendants deserve nothing less.’
Dasgupta concludes on a note of hope that is being echoed throughout the travel industry at the moment. Firstly, we are more collective in our thinking than often thought. ‘There is growing evidence, however, that our preferences are affected by the choices of others – they are ‘socially embedded’. Since we look to others when acting, the necessary changes are not only possible but are likely to be less costly and less difficult than often imagined.’ Secondly, we can use the same ingenuity that has taken us so far from nature so quickly to return to it.
If there is will and ability, what are we waiting for?
Read the full report here. Please get in touch if you’d like to join our mission to make this vision a reality.
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