UN Recognizes GDP Alone Doesn’t Measure Economic Wellbeing

Image: Cesar Aguilar/Pexels

Protecting nature and maximizing the capacity of land and water to sequester carbon is one of the best tools to help fight global climate change. Yet many of Earth’s most biodiverse ecosystems are in serious jeopardy: for example, a first-of-its-kind study from Frontiers in Forests and Global Change revealed that the Amazon rainforest emits more greenhouse gases than it absorbs. Long heralded as a massive carbon sink, deforestation along with other human activity in the Amazon is causing the accelerated release of greenhouse gases into the atmosphere.

Why This Matters: Curbing the destruction of nature and supporting nature-based solutions to climate change is a matter of political and economic will. More than half of global GDP depends on high-functioning biodiversity, yet one-fifth of the world’s countries are at risk of their ecosystems collapsing because of the destruction of nature.

This is why it was important that the UN Statistical Commission recently reached an agreement on a “beyond GDP” framework of measuring economic wellbeing while accounting for natural capital (forests, oceans, etc). Forests and other ecosystems are more valuable to nations when they are intact, and this new framework can begin the process of formally recognizing the economic value of nature and encouraging its conservation.

As Elliott Harris, Assistant Secretary-General for Economic Development and UN Chief Economist explained,

“We’ve treated nature as if it were free and as if it were limitless. So, we have been degrading nature and using it up without really being aware of what we were doing and how much we were losing in the process.”

Valuing Nature: As the world’s economies grow, the world must collectively find a way to balance conservation and economic growth as many of the components of our modern life are dependent on finite natural resources. Taking stock of natural resources is the first step but ecosystem accounting is also crucial to safeguarding natural capital.

As the UN explained, a key aspect of ecosystem accounting is that it allows the contributions of ecosystems to society to be expressed in monetary terms so those contributions to society’s well-being can be more easily compared to other goods and services we are more familiar with.

  • Monetary estimates can provide information for decision-makers, for example for economic policy planning, cost-benefit analysis, and for raising awareness of the relative importance of nature to society.
  • Ecosystem service values are derived by using a range of economic valuation techniques.

A McKinsey & Company report from last year echoed the need for more widespread ecosystem accounting to better sequestration CO2, create jobs, and prevent the emergence of new zoonotic diseases. Preventing zoonotic diseases is especially crucial as the world witnessed how costly the COVID-19 pandemic has been for the entire world–costing the U.S. economy alone $16 trillion.

These findings further underscore the importance of the goal to protect 30% of nature by 2030, it’s not just a lofty conservation goal, it’s a crucial component of supporting the global economy. 

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