TEDxEcoleHôtelièreLausanne - Eva Zabey - The economy, it's nature's business



you may have noticed that I'm expecting a baby I'm really excited about it and I hope the life she will have will be even better than mine in many respects at least that's quite likely her life expectancy will be higher than mine she'll have access to better education and shall have a greater chance of becoming a top executive than me but I have a concern many people share somehow I know that our well-being has improved at an environmental costs and so I wonder can we continue to progress at this rate or will we be stopped by the natural limits of the earth many of us feel we need to reach a balance continue to progress but ensure there are resources left for our children and grandchildren and in fact this idea of balance is not new at all rewind to about 2000 BC in China there was a law that essentially said don't cut down trees in spring let them grow and don't catch fish in summer let them reproduce and I'm sure you're all familiar with the Garden of Eden and even older tradition did you know that Adams task in the garden was to work it and guard it yes both those things work it and guard it the order of words is no coincidence working or shaping the world to make it better for us is what we've been doing from the beginning and we've become experts at it but it's also our responsibility to guard it too and that's where I think we haven't been so good so how can we make sure we guard it too well there are many opinions and solutions out there some people suggest we should simply decide to reduce our use and say protect species or areas of land and that's for sure part of the solution but how about this guard it as part of the way we work it today the way we work our world is the economy the economy is an incredibly powerful way for people to express their preferences and drive progress in areas that actually matter to them so can we use the economy to guard and work our Garden of Eden there are positive signs this is already starting to happen go to your local shop and you may be able to buy paper that's labeled FSC which stands for the Forest Stewardship Council just one of many schemes that try and show how you can work and God a forest the total market size for certified wood and paper products is 5 billion dollars a year or enjoy a nice meal in a restaurant and you may eat certified fish the annual market size for certified agricultural products is over 40 billion dollars a year so if these markets are already emerging do we need to do anything about it well the problem is that beyond the world of products and commodities like paper wood fish or fruit nature still offers us so much more that still not really accounted for in today's economy take for instance the air we breathe everyone prefers to breathe cleaner rather than dirty air but can you show this preference through your economic choices not really air is just a public good that belongs to everyone cleaner is a resource nature provides to us for free it's not included on any balance sheets as long as there's enough clean air to go around it's all okay often you have to wait till a limit is reached to realize something has a value but then how much is cleaner worth and who should pay for it and shouldn't we realize the value of cleaner before it gets polluted in 2005 there was a breakthrough in the way people thought about our natural resources a group of over 1300 scientists from around the world agreed on the concept of ecosystem services an ecosystem is a unit like a forest a mountain or a wetland it can even be a piece of cultivated land or a city and an ecosystem provides a service when someone benefits from it so if we take the example of a forest as an ecosystem the services it provides maybe would but it also stores carbon cleans water and controls erosion the concept of ecosystem services is really helpful when you're trying to get business involved because services can be bought sold or traded and therefore they have / value I work for an association of about 200 leading companies called the world's business council for sustainable development and over the past decade I've seen companies realize that they not only impact on ecosystem services they also depend on them yes all businesses depend on ecosystem services whether they know it or not for example most if not all industries use water the food food companies rely on services like pollination and pest control other industries are not as directly linked to ecosystems like hotels or restaurants but still impact and depend on them hotels need water energy furniture landscapes food sometimes even snow or underwater species to keep their guests happy and if you think of an industry that doesn't look like it's linked to ecosystems at all like banks you may be surprised today even banks are starting to assess ecosystem risks before lending or investing understanding ecosystems is not only about managing risks like will my water supply run out will an NGO boycott my products understanding ecosystems is also an opportunity you can save costs find new markets and develop products that better match your consumer preferences companies that include ecosystem value in their decision making will make better decisions if your business is hydropower you should worry about the management of the forests nearby because as I mentioned before forest control erosion and keep sediments out of your reservoirs if your business is to make laundry powder your consumers will like your product more if it saves energy by working just as well at lower temperatures but once you've realized that nature has a value and including it will help you make better decisions how do you actually do the math it's not my intention to get into the nitty gritty detail but I wanted to say that there are many methodologies out there that have evolved and improved over the past 50 years or so but to give you an example of how you can do the maths let's look at the value of a wetland wetlands provide strong protection they act like speed bumps slowing down the speed and intensity of storms and hurricanes in the Gulf of Mexico before Hurricane Katrina hit in 2005 wetlands were being destroyed for develop it costs about two hundred billion dollars to restore New Orleans after the hurricane but there was a proposal to restore the wetlands before the hurricane that would only have cost 14 billion dollars over 30 years it was rejected because it was considered too costly and today we wish we would have accounted for the true value of the wetlands before the damage was done sometimes people have made smart decisions before hand and a well-known example of this is New York City's tap water did you know that the water that comes out of New York City's taps has never been through a filtration plant and before I go on don't worry if you've drunk it you'll be fine it's completely safe the Catskill Mountains watershed nearby filters the water naturally in the late 1980s the watershed was in really bad shape so the city considered building a filtration plant that would have cost between six to eight billion dollars not including operating costs instead they decided to restore and conserve the watershed for just one and a half billion dollars by saving the watershed they saved over four and a half billion dollars this example shows how you can put an epic economic value on nature by comparing the service it provides with a man-made substitute filter water in an industrial plant or let the watershed do the job for you but other situations are not as straightforward especially when you're trying to value aesthetic or cultural things that are very important to people but also the tourism industry and so we may need to think of other ways of putting a price on nature how much is the beauty of a mountain like the Matterhorn worth if you asked people how much they would actually be willing to pay to preserve its beauty some people would say nothing but others probably richer people may say hundreds or thousands of dollars you could also look at how much tourists do pay to come and visit the mountain and add up say their plane tickets food and hotel all you could compare the property value of houses with a view on the mountain with ones that don't have that view so there are ways of assessing an economic value of nature and doing so helps us make better decisions in fact some leading CEOs are publicly stating that they see the value of ecosystem valuation and smarter laws and public policy are starting to emerge that include ecosystem value too so to recap the problem is simple this huge natural wealth we've been using for free is being degraded precisely because it's not being accounted for some experts say we're losing at least two to five trillion dollars worth of ecosystem services each and every year let's give ourselves the challenge that by 2050 our markets will incorporate the true value of ecosystems if nature is a free all-you-can-eat buffet will end up in a big environmental mess but if nature is truly accounted for then the cheapest goods will also be the ones that are the most sustainable by 2050 4000 years after the Chinese lure I mentioned at the beginning I believe we can reach this balance so many of us are looking for but in 2050 my daughter will only be 38 years old so we better get a move on the dilemma environment versus the economy is so how did its environment in the economy and if we can do this I believe will be on track to both work our world and guard it thank you very much




Comments
  1. I love how this wasn't centered around the idea of OR but AND, simply taking the environment and it's value into account when making decisions and actually seeing the costs related, very interesting!

  2. An excellent talk. I gave a related talk on ecosystem services at TEDx Yerevan, which I called "Redefining our economic systems: Could a forest be worth more than a gold mine?" since the host country has a very low forest cover and is heavily dependent on mining.

  3. Wonderful talk! As a staunch eco-skeptic, I am often angered by catastrophic or guilt-based eco-talk. For once, this is a convincing argument that there is a "work and guard" solution that does not involve developing countries giving up on improved living conditions. I am particularly impressed by the notion of ecosystems where eco can be both "economy" and "ecology". I think this speaker represents the new generation of eco-professionals that will replace the old shrieking guard. Thank you!

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