"A landmark UK government report has called for a thorough overhaul of
economic methods for valuing natural assets, arguing among other things
that gross domestic product is a short-term metric that allows for the
potentially catastrophic exploitation of nature.
The 600-page report, by Cambridge University economist Professor Partha
Dasgupta, argues governments should adopt an “inclusive” concept of
wealth that systematically assigns a monetary value to natural assets
and biodiversity, through what he calls “natural capital accounting”.
Dasgupta said measures like GDP could “mislead badly” because they
emphasised the value of annual production without taking any account of
the longer-term depletion of natural assets and destruction of
biodiversity they cause. But he said this depletion and destruction
would have severe long-term economic impacts.
“If the societal goal is to protect and promote well-being across the
generations (i.e. ‘social well-being’), governments should measure
inclusive wealth (societal means to those ends). Inclusive wealth is the
sum of the accounting values of produced capital, human capital and
natural capital,” he wrote.
The report uses mathematical modelling to find the value of natural
capital and place it in a broader context of inclusive wealth. Dasgupta
contrasts the conventional macroeconomics of wealth – “built on the view
that human society is external to nature” – with the “economics of
biodiversity”, which accepts humans are embedded in nature."
*** Xanni ***
Chief Scientist, Xanadu
Partner, Glass Wings
Manager, Serious Cybernetics