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Friday, October 10, 2008

Much greater economic loss from ecological destruction than from the financial crisis

Nature loss 'dwarfs bank crisis'.

Speaking to BBC News on the fringes of the congress, study leader Pavan Sukhdev emphasised that the cost of natural decline dwarfs losses on the financial markets.

"It's not only greater but it's also continuous, it's been happening every year, year after year," he told BBC News.

"So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today's rate we are losing natural capital at least between $2-$5 trillion every year."

Sukhudev is an economist working for Deutsche Bank.

This is a major problem of Capitalist economics and accounting: freely available resources, those that are not apropiated or monetized, are just worth nothing for Smithian accountants but the reality is that they are the very fundamentals of all economy and would they be accounted properly, the ecological problem would be measured more properly. If each industry that pollutes is accounted for the damage caused to Nature (public property), they would owe the public loads of money in damages. If each patch of wilderness that is felled and plotted has to pay to the public for the loss, the price of transgenic soy or farmed shrimps would soar in accordance to the public damage caused. So far, nevertheless Nature is heavily undervalued if not just not valued at all.

This is not just a shame but a major structural public problem. The figures mentioned show how much it is worth: much more than all the finacial crisis together. Time to stop the waste.

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