We revisit the landmark review on economics and biodiversity and discuss what can be done to integrate nature into economic decision-making.
In 2021 we wrote about the publication of the Dasgupta Review, a landmark report on nature and the economy. In this article, we revisit the report’s headline messages, consider what progress has been made in the years since its release and what we should do next.
What is the Dasgupta Review?
The Dasgupta Review is an independent, global report on the economics of biodiversity. It was commissioned by the Treasury in 2019 and was led by (and named after) Sir Partha Dasgupta, a prominent University of Cambridge economist.
The key takeaways
The review is a 610-page document. Fortunately, there’s an abridged version and one containing the headline messages. We’ve summarised the latter here:
- Nature is an asset, just like productive capital (roads, buildings, and factories) and human capital (health, knowledge, and skills). Our economies, livelihoods, and well-being depend on it. However, it has intrinsic, non-economic value too.
- We’ve not managed nature sustainably. As productive and human capital have increased, natural capital has declined. Productive and human capital gains have been made irrespective of the cost to the natural world. In fact, damage to nature is often seen as a given in attaining economic growth and development.
Image source: Green Alliance
- Our systems are failing to protect nature. Nature is not reflected in markets because much of it is “open to all at no monetary charge”, “hard to trace”, and damage often goes unaccounted for. Governments encourage unsustainable activities and international institutional arrangements are not in place to protect global public goods like the ocean or the world’s rainforests.
Image source: The Dasgupta Review
- Our economies are not external to nature, but embedded within it. We shouldn’t take from the natural world without thinking and acting reciprocally and considering nature’s ability to supply and regenerate.
- Nature needs to be included in economic decision-making. To do this, Dasgupta argues that we need to change how we evaluate economic success. Our current measure, GDP, measures flows of money, and not stocks of wealth (such as natural assets) or their depreciation. In this way, a state can be celebrated for its economic growth whilst simultaneously eroding its natural assets. Sustainable economic growth requires a different approach.
- We need to transform our systems and institutions. According to the review, we need to govern trans-national nature globally; develop a financial system that enhances and accounts for the natural world; as well as an education system that inspires individuals to act.
Topics that the headline report also mentions include:
- Food production
- Meeting energy demand
- Consumption and production patterns
- Population growth
- Protected areas, multi-functional landscapes, and nature-based solutions
- Poverty alleviation
Since the Dasgupta Review
The four years since the publication of the Dasgupta Review have seen two meetings of the Conference of the Parties to the United Nations Convention on Biological Diversity (COP15 in 2022 and COP16 in 2024).
The Kunming-Montreal Global Biodiversity Framework (GBF) was adopted at COP15, and, under this agreement, countries were required to submit updated national biodiversity strategies and action plans (NBSAPs) by COP16 in November 2024.
However, in the run-up to the event, we blogged that only 10% of countries had submitted their plans. Nevertheless, important discussions took place at the conference, which we wrote about in the days after.
Regarding the Dasgupta Review specifically, it seems relatively little has been posted since the widespread attention it received in 2021. However, in March this year, Green Alliance, an independent think tank and charity focused on environmental leadership, released The nature of our economy: implementing the Dasgupta Review.
In this report, Green Alliance state that, as yet, little of the Dasgupta Review has been acted upon by the government. Their discussions with experts suggested that a major reason for this is the complex and high-level nature of the review. However, in many ways, this was deliberate, as Dasgupta’s objective was a complete critique of our current economic system.
Where the Dasgupta Review didn’t provide actionable solutions, Green Alliance’s new report aims to offer a practical framework for applying the review’s findings to UK policy.
Implementing the Dasgupta Review
Green Alliance’s recommendations, spanning the short to the long term, include:
- Supplementation of GDP with an additional indicator such as net inclusive income, which gives greater prominence to gains in natural and human capital. At the same time, we should be working towards a replacement for GDP.
- Basing government financial accounting on assets (including natural assets) rather than cashflows. This encourages investment in the services and activities that constitute these assets as they are seen as valuable. The government should also investigate and communicate the environmental impact of budget and spending review decisions.
- The banking and insurance industries should take the financial risks of nature degradation into much greater consideration and the Bank of England should appoint individuals with expertise in natural science to its committees. A science-based green taxonomy (which specifies which investment options are environmentally sustainable) should also be introduced.
- The government should create a pipeline of high-impact nature projects ready for private investment. Nature markets should have a clear and independent system of governance and businesses should be incentivised to invest. There are many possible ways to do this, for example, a reporting requirement that makes it clear that businesses should be investing in nature or mandates like the current Biodiversity Net Gain
Conclusion
The Dasgupta Review is a rich account of the complex – and typically fraught – relationship between economics and the natural world. We know what the problems are and, increasingly (with the help of organisations like Green Alliance), how to fix them. We just need to put it all into action – because, ultimately, it doesn’t make sense to deplete what sustains our economies and ourselves.
