Planet Needs a World Bank for Natural Assets, Dasgupta Says
(Bloomberg) -- The author of a landmark study on the economics of biodiversity is pushing policy makers to transform their words into action by creating a global institution to manage the planet’s natural assets.
Partha Dasgupta, whose eponymous review was backed by Group of Seven finance ministers last week, is calling for a body akin to the World Bank or International Monetary Fund to protect shared resources such as the oceans and atmosphere. Such an institution would need powers to charge those currently using these common assets for free, he said in an interview.
“We need something desperately for managing the global commons,” Dasgupta said ahead of an annual summit Tuesday by the Global Ethical Finance Initiative, which aims to drive positive change in the financial sector. “We ought to be paying for the right to send huge ships with cargo across the Pacific or the Atlantic.”
Dasgupta’s U.K. government-commissioned review in February called for an urgent overhaul of economic metrics to take into account the price of damaging natural ecosystems. It has helped catalyze interest from investors and policy makers in actively protecting nature. A coalition of institutions managing more than $11 trillion have committed to protect and restore biodiversity through their financing and investments.
The University of Cambridge economist hopes to see serious talks on creating such an international institution at various United Nations summits later this year, though he doubts that will happen. The topic of biodiversity will be the focus of a UN conference in China in October and then a theme at the next major climate change conference in Scotland in November.
As well as an enforcement body, Dasgupta backs nations demanding compensation for the protection of natural assets within their own borders. The Brazilian government has asked the U.S. for $1 billion a year to curb deforestation in the Amazon, controversial given President Jair Bolsonaro’s environmental record. Indonesia has previously been paid by Norway for reducing emissions from burning forests.
“It’s no good sitting outside and bleating about the fact the rainforests are disappearing and isn’t it awful,” Dasgupta said. “Simple economics says some transfer payments are required to compensate nations for their perceived loss in output as a result of keeping these public goods intact.”
While Dasgupta acknowledged that such proposals would draw opposition and conflicts of interest, he said the thinking behind it was not rocket science but “absolutely elementary first-year economics” applied to new terrain.
“That’s the psychological repugnancy: we have to pay them to keep the rainforests?” he said. “And the answer is yes. That thing is a global public good.”
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