What Can Be Done to Stem the Tide of Biodiversity Loss

There are essentially two different world views of the proper policies to be taken to protect biodiversity. Environmental economists see the loss of biodiversity as an example of what they call market failure—that is, market prices fail to capture the true economic value of biodiversity. Ecological economists, on the other hand, see biodiversity loss as a failure of markets—that is, an unregulated market economy with its emphasis on short-term individual gain cannot be expected to preserve ecological integrity. If market failure is the problem, the proper policy response is to "get the prices right" by using taxes and subsidies to ensure that all the economic benefits of biodiversity are included in its price. If market prices are inherently incapable of reflecting all the benefits of biodiversity, stronger governmental action is called for.

In spite of the inherent conflict between market valuation and biodiversity preservation, a number of steps can be taken to minimize this conflict. These include the following:

1. Stop subsidizing the destruction of biodiversity. In many cases governments subsidize the destruction of biodiversity by supporting environmentally unsound practices that would not take place under free market conditions. Examples are massive subsidies by governments around the world to the fishing industry, which has led to overharvesting of fisheries worldwide; and subsidies to the tim ber industry, encouraging the destruction of old-growth forests. Direct and indirect subsidies to the fossil fuel industry encourage the exploitation of pristine habitats.

2. Use the market system where possible to protect biodiversity. For the market system to function properly, the prices of commodities must reflect their true value. When market failure occurs it is a legitimate function of government to ensure that unregulated markets do not harm the social good. Biodiversity is generally undervalued since it is not traded in the market. In some cases it is possible to partially correct this shortcoming by giving consumers information, for example, through eco-labeling—labeling tuna as "dolphin friendly" or lumber products as being from "sustainable forests."

3. Exploit win-win situations. In some cases jobs and income may be generated from biodiversity protection. Eco-tourism may generate more income than the exploitation of natural areas. Preserving natural areas for natural regeneration may increase income by more than enough to offset the loss created by the reserve. For example, it has been shown that marine reserves may increase the number of fish outside the reserves. More money may be made by whale watching than can be made by whale hunting.

4. Create and protect large contiguous wild areas. Ecosystems function in ways that we are only beginning to understand, and we are losing them before we know exactly how they work. As Aldo Leopold, one of the founders of the American conservation movement, put it: A basic rule of intelligent tinkering is to save all the parts. The more wild areas we protect, the greater the chance that we will survive the population and resource use bottlenecks of this new century.

irreversible, and the current loss of biodiversity limits our future choices. Humans are now triggering unpredictable but most likely negative changes in the environment. The effect of climate change on agriculture could put tremendous pressure on the ability of technology to cope with feeding the 6 billion-plus people on the planet. With biodiversity loss comes a loss of responses to this adverse change. In the twenty-first century we will need all the flexibility at our disposal to meet the challenges that may threaten the very existence of our species.

See also: Economics; Industrial Revolution/Industrialization; Sustainable Development; Why Is Biodiversity Important?

Bibliography

Baskin, Yvonne. 1997. The Work of Nature: How the Diversity of Life Sustains Us. Washington, DC: Island Press; Daily, Gretchen, ed. 1997. Nature's Services: Societal Dependence on Natural Ecosystems. Washington, DC: Island Press; Hollowell, Victoria, and Peter Raven, eds. 2001. Managing Human Dominated Ecosystems. St. Louis: Missouri Botanical Gardens Press; Kellert, Stephen. 1996. The Value of Life: Biological Diversity and Human Society. Washington, DC: Shearwater; McDaniel, Carl, and John Gowdy. 2000. Paradise for Sale: A Parable of Nature. Berkeley: University of California Press; Pearce, David, and Dominic Moran. 1994. The Economic Value of Biodiversity. London: Earthscan; Spash, Clive, and Nick Hanley. 1995. Cost Benefit Analysis and the Environment. Cheltenham: Edward Elgar; Swanson, Timothy, and Edward Barbier. 1992. Economics for the Wilds. Washington, DC: Island Press; Wilson, Edward O. 1992. The Diversity of Life. Cambridge: Harvard University Press.

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