Cost of living – re-examined

When the whole world is frightened by a supposed economic crisis, it is good to keep some calm through a reality check. A recent article on the value of biodiversity (in German) provided just that.

The article talks about an ongoing global study named “The Economics of Ecosystems & Biodiversity (TEEB)”. The study synthesises current knowledge of the economic and human value of biodiversity and environmental resources. It aims to quantitate the value of the resources we take for granted, such as forests, soil, water. The results are both eye-opening and urgent.

The current financial crisis destroyed a lot of wealth and is threatening to destroy more. However, the preliminary results from the study show that the economic wealth destroyed in the same time through destruction of biodiversity and ecosystems is considerably greater than the wealth destroyed in the financial crisis.

So, my suggestion is to relax about possibly evaporating stock/property portfolios and consider the now quantified value of our other portfolio, all the free things we take for granted every day.

The valuation presented in the study means that this wealth is no longer free. In fact its monetary value is greater than we ever thought. We should all make an effort to not involuntarily dispossess ourselves of what are our greatest riches.

As it turns out, there is no nation that can nationalise or guarantee biodiversity in the face of crises, like they do with bank savings. While both are important, I suggest that our efforts to protect our accumulated riches in biodiversity and ecosystems should have greater priority than our efforts to protect our savings in the bank.

The good news is that such studies are undertaken, and that they are undertaken by influential people on behalf of influential institutions. It can be hoped that in the future policy-makers will consider their policies’ impact on the wealth provided by ecosystems and biodiversity.

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