Biodivers Conserv (2011) 20:3453–3458 DOI 10.1007/s10531-011-0132-y ORIGINAL PAPER
Economic growth and biodiversity Marcelino Fuentes
Received: 14 January 2011 / Accepted: 24 July 2011 / Published online: 30 July 2011 Ó Springer Science+Business Media B.V. 2011
Abstract I argue that there is no fundamental conflict between economic growth and biodiversity. Humans can maintain and produce biological diversity just as we can maintain and produce other goods. Efforts to preserve and enhance biodiversity add to the size and growth of the economy. We are losing biodiversity because of human preferences and human inefficiencies, not because of economic growth. Inefficiency occurs when our actions do not reflect our real preferences, and is mainly due to failures of social coordination. To alleviate the problem of biodiversity loss we should address these failures. Keywords Biodiversity Economic growth Human preferences Inefficiency Governance
Introduction Economic growth is the increase in the production and consumption of goods and services. Production entails the transformation of our surroundings. We transform stuff that is less valuable, such as human leisure or raw materials, into stuff that is more valuable. As a result of economic growth our environment becomes less ‘pristine’. However, contrary to what Czech (2008) argues, there is no fundamental reason why it must become less biologically diverse. The root causes of biodiversity losses are human preferences and human inefficiencies, not economic growth. It is possible to have both economic growth and constant or increasing biodiversity.
Human preferences A reason why human activities have often caused losses of biological diversity is that we do not have a strong preference for biodiversity. We generally prefer to produce and M. Fuentes (&) Facultade de Ciencias, Universidade da Corun˜a, 15071 A Corun˜a, Spain e-mail:
[email protected]
123
3454
Biodivers Conserv (2011) 20:3453–3458
consume other goods and services. For example, we generally prefer food, fiber, shelter materials and medicines produced in monocultures or in factories to those produced in species-rich ecosystems. We often prefer parking lots to woodlands, or watching movies to walking in the wild. Given that economic growth reflects the increasing satisfaction of human preferences and that some of these preferences are incompatible with biodiversity, it is not surprising to find a negative correlation between economic growth and at least some measures of biodiversity (Naidoo and Adamowicz 2001; Asafu-Adjaye 2003; Dietz and Adger 2003; Mills and Waite 2009). Preferences evolve (Skourtos et al. 2010). If the relative preference for biodiversity increased, the biodiversity-enhancing industry would grow accordingly—sponsored by private firms, not-for-profit organizations or governments. As the history of humankind amply shows, changes in preferences do not result in negative economic growth—although this could be the case if we increased our preference for leisure or ‘pristine-ness’. Changes in preferences result in shifts in human effort. This human effort keeps adding value to our surroundings and contributing to economic growth. When we prefer a parking lot to a woodland, we spend our time and effort destroying the woodland and building the lot. We sacrifice the woodland, the building materials, and our time and energy. Our activity contributes to the size of the economy. The value we have added to the place contributes to our wealth. A change of preferences may lead us to value more a woodland than a parking lot. We may then set to destroy the lot and facilitate tree growth. Again, this activity adds to the size of the economy. There is no difference in how the activities that reduce biodiversity and those that increase it contribute to the size and growth of the economy. Which activities we actually conduct depends on our preferences.
Competitive exclusion Czech (2008) explicitly applied the idea of competitive exclusion to the relationship between humans and other organisms. He argued that any increase in human production and consumption necessarily leaves fewer resources for other organisms. There are several problems with this idea. First, humans use many resources that are not used by other organisms. Economic growth related to the use of these resources need not affect other organisms. Second, humans increase the availability of resources such as phosphorus, nitrogen and carbon to other organisms. Third, even if human use of resources decreased the abundance of other organisms, this need not entail a reduction in biodiversity. For example, nutrient-poor environments often have less biomass but are more biologically diverse than their nutrient-rich, eutrophic counterparts. Thus, we can decrease or increase biodiversity depending on how we use resources. There is no a priori reason to expect a net negative effect. Humans, as all other organisms, have other effects on biodiversity besides those related to the use of resources. Humans act not only as resource consumers and potential competitors, but also as resources, predators, mutualists and ecosystem engineers. In any of these roles humans can enhance biodiversity, as other organisms do (Paine 1966; Jones et al. 1994; Hacker and Gaines 1997; Hooper et al. 2000; Stachowicz 2001; Marquis 2005; Kylafis and Loreau 2011). Humans seem to have generally increased at least some components of biodiversity at regional scales, and often also so at local scales (Davis 2003; Sax and Gaines 2003). Biodiversity losses at some sites can be compensated by gains elsewhere.
123
Biodivers Conserv (2011) 20:3453–3458
3455
Preservation and production of biodiversity Some authors have argued that biodiversity loss is effectively irreversible because speciation is very slow (Asafu-Adjaye 2003; Dietz and Adger 2003). While the loss of certain biological variants is effectively irreversible, some components of biodiversity can increase quite rapidly. Biodiversity is not only about global species richness, but includes diversity within species and between ecosystems and landscapes. Humans can maintain and produce biological diversity just as we can maintain and produce other goods. We add new biological variants to ecosystems via selective breeding, genetic engineering, hybridization and ecological management. We thus contribute to the biodiversity of the biosphere, while making it less ‘pristine’. An example of human preferences directly or indirectly enhancing biodiversity and contributing to the size and growth of the economy is the biotechnology industry. The biotechnology industry produces new biodiversity that has value for us. Reflecting this value, the worldwide revenues of the biotechnology industry were about $89 billion in 2008, up from $63 billion in 2005 and $8 billion in 1992 (Ernst & Young 2006, 2009). Other examples include the traditional breeding of domestic organisms (Darwin 1868; Helms and Brugmann 2007)—with dogs now displaying as much morphological diversity as does the whole class Carnivora according to Drake and Klingenberg (2010)—or the creation of new ecological communities and landscapes for food and fiber production and recreation (Rosenzweig 2003; Palmer et al. 2004; Hobbs et al. 2006; Ellis and Ramankutty 2008). In all these instances human activities create new biodiversity that is valuable to humans, and the act of value creation adds to the size of the economy. Governments and other non-for-profit organizations spend about $10 billion annually on biodiversity conservation (James et al. 2001; Pearce 2005; Gutman and Davidson 2007; see also Pearce 2007; Czech 2008). This money funds valuable activities that contribute to the size of the economy. A figure of $10 billion annually estimates how much we value keeping to enjoy endangered biodiversity for one more year, or at least that fraction of endangered biodiversity that we hope to save with the current tools of conservation.
Human inefficiencies People signal their preferences by paying in commercial markets, by participating in notfor-profit organizations and by voting in political elections. But the signaling is imperfect and human activities resulting from market, non-for-profit and political choices do not accurately reflect human preferences. This inefficiency causes unnecessary biodiversity losses (Pearce and Moran 1994). Thus, biodiversity losses result both from human preferences and from the inefficiency of human institutions to translate preferences into action. Markets based on well-defined, ample and secure property rights efficiently allocate human effort and resources to their most valuable uses and thus tend to satisfy human preferences. The other side of the coin is that under imperfect property rights, free-market exchange is incomplete or inexistent and does not fully satisfy human preferences. The notions of ‘‘market failure’’, the public goods problem or the tragedy of the commons all ultimately relate to this problem. Biodiversity is a case in point. Property rights capture only a small fraction of the value of biodiversity. Much of biodiversity belongs to no one, and so no one has the proper incentives to protect or increase its value. Even if a piece of habitat belongs to someone, the owner has no control over who can enjoy certain values of the biodiversity it contains.
123
3456
Biodivers Conserv (2011) 20:3453–3458
As a result, many who enjoy the benefits of that biodiversity do not pay for them and the owner lacks the incentives to fully protect and enhance biodiversity. Lack of payments discourages private efforts to preserve and enhance biodiversity. This leads to levels of biodiversity that are lower than what people would prefer. On the other hand, some forms of biodiversity may be harmful to people. If this biodiversity were private property, then those harmed by it could ask the owners for compensation. Owners would have an incentive to destroy those forms of biodiversity and thus avoid paying damages. Lacking adequate property rights, we can act collectively outside market transactions to move the amount of biodiversity closer to our preferred level. Not-for-profit organizations and governments may replace or complement free markets in order to serve this function. But they have their own problems of discordance between costs, benefits and incentives. In the case of charitable contributions, most of the benefits they generate go to others than contributors. As a result, many people free-ride, contributions do not reflect our real preferences and biodiversity levels do not reach the preferred level. In the case of political decisions, most costs and benefits do not accrue to decision makers—be they individual voters, elected representatives, or bureaucrats—but to society as a whole. Therefore, each political actor does not have the right incentives to maximize social benefits (Caplan 2007). For example, the average citizen does not spend enough effort in finding and voting for the optimal policies because, given the low chances that he or she will determine election outcomes, his or her efforts will not be rewarded. Every voter knows that the same policies are adopted no matter how much effort he or she puts into learning about policy options and the candidates’ adequacy to implement them. Votes are not well informed and well thought, and bad policies follow. Possible examples of popular policies that harm biodiversity include subsidies totaling on the order of a trillion US dollars a year to farming, forestry, water extraction, fishing, energy use, transportation and mining (TEEB 2009).
Conclusions Some authors have argued that wild biodiversity is very valuable for present and future human welfare but that people either do not bother to acquire this information, choose not to act on it, or act in counterproductive ways. According to these authors, people’s behavior as consumers, voters and potential contributors to conservation organizations grossly undervalues wild biodiversity (Balmford et al. 2002; Horton et al. 2003; Diaz et al. 2006; Hillmann and Barkmann 2009). In short, our actions affecting biodiversity do not reflect our real preferences. The solution, however, is not to stop economic growth—which reflects the increasing satisfaction of our preferences—but to address human inefficiency.
References Asafu-Adjaye J (2003) Biodiversity loss and economic growth: a cross-country analysis. Contemp Econ Policy 21:173–185 Balmford A, Bruner A, Cooper P, Costanza R, Farber S, Green RE, Jenkins M, Jefferiss P, Jessamy V, Madden J, Munro K, Myers N, Naeem S, Paavola J, Rayment M, Rosendo S, Roughgarden J, Trumper K, Turner RK (2002) Economic reasons for conserving wild nature. Science 297:950–953 Caplan B (2007) The myth of the rational voter why democracies choose bad policies. Princeton University Press, Princeton
123
Biodivers Conserv (2011) 20:3453–3458
3457
Czech B (2008) Prospects for reconciling the conflict between economic growth and biodiversity conservation with technological progress. Conserv Biol 22:1389–1398 Darwin C (1868) The variation of animals and plants under domestication. Murray, London Davis MA (2003) Biotic globalization: does competition from introduced species threaten biodiversity? Bioscience 53:481–489 Diaz S, Fargione J, Chapin FS, Tilman D (2006) Biodiversity loss threatens human well-being. PLoS Biol 4:1300–1305 Dietz S, Adger WN (2003) Economic growth, biodiversity loss and conservation effort. J Environ Manag 68:23–35 Drake A, Klingenberg C (2010) Large-scale diversification of skull shape in domestic dogs: disparity and modularity. Am Nat 175:289–301 Ellis EC, Ramankutty N (2008) Putting people in the map: anthropogenic biomes of the world. Front Ecol Environ 6:439–447 Ernst & Young (2006) Beyond borders: a global perspective. The global biotechnology report 2006. Ernst & Young, London Ernst & Young (2009) Beyond borders: global biotechnology report 2009. Ernst & Young, London Gutman P, Davidson S (2007) A review of innovative international financial mechanisms for biodiversity conservation—with a special focus on the international financing of developing countries’ protected areas. WWF-MPO, Washington, DC Hacker SD, Gaines SD (1997) Some implications of direct positive interactions for community species diversity. Ecology 78:1990–2003 Helms JA, Brugmann SA (2007) The origins of species-specific facial morphology: the proof is in the pigeon. Integr Comp Biol 47:338–342 Hillmann BM, Barkmann J (2009) Conservation: a small price for long-term economic well-being. Nature 461:37–38 Hobbs RJ, Arico S, Aronson J, Baron JS, Bridgewater P, Cramer VA, Epstein PR, Ewel JJ, Klink CA, Lugo AE, Norton D, Ojima D, Richardson DM, Sanderson EW, Valladares F, Vila` M, Zamora R, Zobel M (2006) Novel ecosystems: theoretical and management aspects of the new ecological world order. Glob Ecol Biogeogr 15:1–7 Hooper DU, Bignell DE, Brown VK, Brussaard L, Dangerfield JM, Wall DH, Wardle DA, Coleman DC, Giller KE, Lavelle P, van der Putten WH, de Ruiter PC, Rusek J, Silver WL, Tiedje JM, Wolters V (2000) Interactions between aboveground and belowground biodiversity in terrestrial ecosystems: patterns, mechanisms, and feedbacks. Bioscience 50:1049–1061 Horton B, Colarullo G, Bateman IJ, Peres CA (2003) Evaluating non-user willingness to pay for a largescale conservation programme in Amazonia: a UK/Italian contingent valuation study. Environ Conserv 30:139 James A, Gaston KJ, Balmford A (2001) Can we afford to conserve biodiversity? Bioscience 51:43–52 Jones CG, Lawton JH, Shachak M (1994) Organisms as ecosystem engineers. Oikos 69:373–386 Kylafis G, Loreau M (2011) Niche construction in the light of niche theory. Ecol Lett 14:82–90 Marquis RJ (2005) Impacts of herbivores on tropical plant diversity. In: Burslem DFRP, Pinard MA, Hartley SE (eds) Biotic interactions in the tropics: their role in the maintenance of species. Cambridge University Press, Cambridge, pp 328–346 Mills JH, Waite TA (2009) Economic prosperity, biodiversity conservation, and the environmental Kuznets curve. Ecol Econ 68:2087–2095 Naidoo R, Adamowicz WL (2001) Effects of economic prosperity on numbers of threatened species. Conserv Biol 15:1021–1029 Paine RT (1966) Food web complexity and species diversity. Am Nat 100:65–75 Palmer M, Bernhardt E, Chornesky E, Collins S, Dobson A, Duke C, Gold B, Jacobson R, Kingsland S, Kranz R, Mappin M, Martinez ML, Micheli F, Morse J, Pace M, Pascual M, Palumbi S, Reichman OJ, Simons A, Townsend A, Turner M (2004) Ecology for a crowded planet. Science 304:1251–1252 Pearce D (2005) Paradoxes in biodiversity conservation. World Econ 6:57–69 Pearce D (2007) Do we really care about biodiversity? Environ Resour Econ 37:313–333 Pearce D, Moran D (1994) The economic value of biodiversity. IUCN—The World Conservation Union, London Rosenzweig ML (2003) Win-win ecology. Oxford University Press, Oxford Sax DF, Gaines SD (2003) Species diversity: from global decreases to local increases. Trends Ecol Evol 18:561–566 Skourtos M, Kontogianni A, Harrison PA (2010) Reviewing the dynamics of economic values and preferences for ecosystem goods and services. Biodivers Conserv 19:2855–2872
123
3458
Biodivers Conserv (2011) 20:3453–3458
Stachowicz JJ (2001) Mutualism, facilitation, and the structure of ecological communities. Bioscience 51:235–246 TEEB (2009) The economics of ecosystems and biodiversity for national and international policy makers. TEEB, Bonn. http://www.teebweb.org. Accessed November 2010
123
