The Dasgupta Review on The Economics of Biodiversity, commissioned by the UK government, was finally released earlier this month. Led by Professor Sir Partha Dasgupta, the Review claims to provide an “Independent Review on the Economics of Biodiversity”, demonstrating the extent of our “unsustainable engagement with Nature” and arguing that, as a result, economics needs to be “embedded within Nature” and “not external to it.”
The use of such language is welcome as it represents a rejection of the dominant, dualist ontology which sees nature as separate to human economic activity and therefore available for exploitation (see Hickel, 2020: Ch 1). The non-dualism advocated by the Review understands that humanity is nature, creating an obligation for us to care for it as we care for ourselves. This philosophy has dominated the majority of human history and is referred to by anthropologists as ‘animism’. It was only during the last few hundred years, as capitalist growth required more and more areas to exploit, that our relationship with the biosphere changed to one of separation and dominance. The Review recognises that a return to a more reciprocal philosophy is required if we are to maintain a state of ecological sustainability.
To this end, the Review criticises Gross Domestic Product (GDP) as “wholly unsuitable for identifying sustainable development” (p. 12), arguing that it “encourages” the pursuit of “unsustainable economic growth and development” (Headline Messages, p. 4). It also concludes that “the global output of goods and services is inevitably bounded” (p. 32) and calls for “changes” (although, notably, not reductions) in production and consumption in order to tackle the ecological crisis (p. 367). Such language could, welcomingly, be interpreted as tentative support for moving towards a post-growth society.
The Review’s main conclusions, however, appear less radical and transformational than its diagnosis of the problem. The primary argument centres on the correction of “pricing distortions” where “Nature’s worth to society…is not reflected in market prices”. The Review therefore argues for a better “accounting of nature” and the inclusion of “natural capital” in national accounting mechanisms. Many economists see this as a vital exercise: financial markets remain the dominant forces in modern capitalist economies and therefore pricing the true cost of environmental externalities must form part of the solution. Kate Raworth (2019) – author of Doughnut Economics - recognises that there is a place for “bringing value and recognition to nature” due to the need to speak the language of power – which is, after all, money.
However, there are some important critiques of this approach. First, research suggests that the natural capital agenda can undermine people’s intrinsic motivation for protecting and defending the natural world. For example, Sandel (2013) demonstrates how providing nature with a market value and introducing financial incentives can lead to the replacement of moral obligations with commercial relationships, and can undermine people’s motivation to act for the public good. Such an approach can also lead to the formalisation of property rights which often entrench and exacerbate inequality. Crompton et al. (2014), when looking at the impact of pricing nature, found that people were more likely to defend the living planet when reminded of the intrinsic value of nature than when they were exposed to financial arguments. Even the concept of “natural capital” presents nature as something to be invested, or exploited, in order to create financial returns, just like other forms of capital. Such arguments suggest that referring to nature through the perspective of finance and capital could in fact reinforce the dualistic perspective that the Review appears to intend to overthrow.
Second, evidence also suggests that giving something financial value does not in fact protect it from exploitation. Jason Hickel (2021) points to wages, and their suppression, as an example: “Capital confronts input prices with the exclusive objective of doing everything possible to depress them. That is true of labour and it's true of nature too”. We can see this in action through the effects of carbon pricing. Over the last decade, several papers have found that resource use continues to rise despite the implementation of very large prices on carbon (Dittrich et al., 2012; Ekins et al., 2016; Schandl et al., 2016). A more recent paper, which synthesised a number of works on carbon pricing, found that their effect on aggregate emissions reductions was extremely limited – generally only between 0% and 2% per year (Green, 2021), demonstrating the limited ability of financial approaches to reduce the exploitation of nature.
In light of such critiques, Raworth (2019) calls for a redefining of the language of power, away from “perfect[ing] the 20th century project of financialising everything” towards ideas which “describe and measure nature’s generosity and life systems in nature’s own metrics”. Many such metrics already exist and are widely used: levels of CO2 in the atmosphere, the quality of the soil, the depletion of ecosystems, the health and happiness of human beings. But Raworth argues for giving real power to these metrics, releasing the economy from the “20th century trappings” of money and capital to create the path towards a “dashboard of metrics for the 21st century” which would allow us to develop and “measure the wellbeing of people and planet…on the terms of life itself”. A small example of this in action can be seen in the experiments of farmers around the world with regenerative agroecology, using alternative methods which work with nature to build resilient ecosystems and restore life and fertility to soils.
Bringing such transformations to scale requires a strong rejection of the economics of perpetual expansion towards one of post-growth and post-productivism, particularly in the Global North. The Review notes that human economic activity “cannot be increased indefinitely” and is instead “bounded” (p.119). Such a transformation becomes even more urgent when we consider it from the perspective of social justice. Chapter 14 of the Review demonstrates that low-income countries and households suffer most from ecological breakdown. In addition, despite the strong advances in health and education during the 20th century that the Review notes in Chapter 4, over 60% of the world’s population still live below an ethical poverty line of $5 per day (Hickel, 2017). Overcoming this injustice would require a substantial increase in the resource use of much of the world’s poor, something which would have considerable ecological implications (see Ch 4). Creating the ecological space for Global South economies to meet the need of their populations requires a radical reduction in the material throughput and resource use of Global North economics. While the Review recognises this requirement, there are real question marks over whether the market valuation approach it proposes will be sufficient for its achievement.
In conclusion, there is much to welcome in the Dasgupta Review’s analysis of the ecological crisis: its recognition of the limits to growth; its calls for changes in our patterns of production and consumption; its recommendations that certain areas of nature need to remain off limits to human development; and the non-dualistic language it uses which seeks to embed human economic activity within, and not separate from, nature. However, its calls for a better accounting of nature within markets and national accounts are founded on a utilitarian framework that cannot support the more radical transformation in thinking that the Review rightly recognises is required. While the internalisation of environmental externalities in financial markets is vital, it does not address the need for a deeper philosophical and political challenge to the economic growth orientation of capitalism. Longer-term solutions require a shift away from such a system, towards flourishing, post-productivist societies governed by the wider set of social and environmental values and metrics on which life itself depends.
References
Crompton, T., Weinstein, N., Sanderson, B., Kasser, T., Maio, G. and Henderson, S., 2014. No cause is an island: how people are influenced by values regardless of the cause. Available from: https://valuesandframes.org/resources/CCF_report_no_cause_is_an_island.pdf.
Dittrich, M., Giljum, S., Lutter, S. and Polzin, C., 2012. Green economies around the world. Implications of resource use for development and the environment. Vienna: SERI.
Ekins, P., Hughes, N., Brigenzu, S., Arden Clark, C., Fischer-Kowalski, M., Graedel, T., Hajer, M., Hashimoto, S., Hatfield-Dodds, S. and Havlik, P., 2016. Resource efficiency: Potential and economic implications.
Green, J.F., 2021. Does carbon pricing reduce emissions? A review of ex-post analyses. Environmental Research Letters.
Hickel, J., 2017. The Divide: A brief guide to global inequality and its solutions. EPUB ed. London: Penguin Random House.
Hickel, J., 2020. Less is More: How degrowth will save the world. EPUB ed. London: Penguin Random House.
Hickel, J., 2021. Economists who believe that simply pricing something will protect it from exploitation should talk to literally anyone who has ever worked for wages, particularly in multinational supply chains. Twitter: 2nd February. Available from: https://twitter.com/jasonhickel/status/1356655186069098502.
Raworth, K., 2017. Doughnut Economics: Seven Ways to Think Like a 21st-century Economist. EPUB ed. London: Penguin Random House.
Raworth, K., 2019. Interview with Kate Raworth at Trees as Infrastructure Workshop. Available from: https://vimeo.com/377023491.
Sandel, M.J., 2013. What Money Can't Buy: The Moral Limits of Markets. London: Penguin Books.
Schandl, H., Hatfield-Dodds, S., Wiedmann, T., Geschke, A., Cai, Y., West, J., Newth, D., Baynes, T., Lenzen, M. and Owen, A., 2016. Decoupling global environmental pressure and economic growth: scenarios for energy use, materials use and carbon emissions. Journal of Cleaner Production, 132, pp. 45-56.
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