Welcome to the biosphere economy
25 June 2010 | Article
The ‘Biosphere Economy’ promises to herald a process of change as profound as the Industrial Revolution where the economy will be linked to biodiversity to yield sustainable solutions.
Almost 200 years ago, Thomas Newcomen built the world’s first commercially successful steam engine—to pump water out of deep coalmines. In the process, he handed humanity the keys to the Earth’s fossil fuel resources, an event which in turn helped fuel the Industrial Revolution. Ever since, economists, accountants, engineers and politicians have undervalued natural resources. Now, however, a new revolution is building, ignited by resource constraints—this time with economists and accountants leading the charge, alongside activists, engineers, scientists, business leaders and, eventually, politicians.
Take Pavan Sukhdev, former managing director of the Markets Division of Deutsche Bank—who later in 2010 will launch the findings of the TEEB study, (hyperlink here to TEEB website) the acronym standing for ‘The Economics of Ecosystems and Biodiversity’, an initiative of the United Nations Environment Programme (UNEP). The focus is on the creation in the coming decades of what we call the ‘Biosphere Economy’. And the evidence suggests that this will be as profound in its impacts as the original Industrial Revolution, with the critical difference that this time that the economy will be working in sync with the biosphere, rather than against it.
The business opportunities likely to be created by the shift in the prevailing market paradigm are profound. The degradation of the Earth’s ecosystems and biodiversity due to deforestation alone costs our natural capital somewhere between $1.9 and $4.5 trillion every year.
Today we understand that tropical rainforests act as freshwater pumps. The Amazon generates some 8 trillion tons of water a year, feeding into an aerial belt of water vapor that connects tropical forests across the globe. Cut down the Amazon, we are told, and rainfall will decrease from South America to Tibet, generating (to take just one example) water scarcity in Brazil, where the energy supply sector is 70% dependent on hydropower.
Conserving the Amazon is therefore not just a matter for conservationists, but a strategic issue for the companies whose operations make up the $1 trillion agricultural industry in southern Brazil and Argentina. Enter the Biosphere Economy, a future where business-as-usual and politics-as-usual increasingly take account of natural capital and related forms of value, bridging the gap between man-made assets and nature’s ecological infrastructures that underpin our economies and societies.