Natural Capital Is Essential For Growth

The emergence of proposals from a House Committee to drastically cut the budget of the Environmental Protection Agency underlines just how disastrously out of touch many politicians are with modern economic thinking.
The idea that it could be prudent to slash the budget of an organization that helps to sustain clean air and water and the quality of the natural environment is in large part predicated on the idea that the depletion of natural resources, high greenhouse gas emissions and disappearing animals and plants are the acceptable price of progress. The assumption is that the environment is a ‘nice to have’, a luxury affordable only in the good times.
In this worldview, measures to conserve Nature and cut pollution are regarded as unnecessary brakes on growth and competitiveness, a drag on development and barriers to improving people’s lives. A natural corollary is that relaxing environmental controls will result in economic benefits. Not only is this wrong, the reverse is the case: without Nature’s essential services, the economy is nowhere.
This latter conclusion is backed by a growing body of scientific evidence that confirms how healthy environments make vast contributions to economics. In some cases dollar values are being assigned to some of the ecological services that are essential for maintaining development. I present a selection of this material in my new book, What has Nature ever done for us?
For example the work done by insects, mainly bees, in pollinating crops is estimated to be worth worldwide about $190 billion annually. Almond growers in California’s Central Valley know all about this because they spend millions of dollars each year in hiring beehives so that their trees can be pollinated and make fruit. They need to do this because wild pollinators that would do the work for free have been eradicated by intensive farming.
Then take a look at the difference in the damage caused by category 5 Hurricanes Katrina and Rita when they made landfall on the US Gulf Coast in September 2005. One caused more than 1000 fatalities and more than $80 billion worth of property damage, while the other (Rita) led to 7 people losing their lives and minimal disruption to infrastructure and buildings. The main reason why one storm caused so much more damage than the other was the state of the coastal wetlands where they made landfall. Katrina hit degraded wetlands and then flooded much of New Orleans, while Rita hit healthy coastal marshes that took away much of the power in its tidal surge before it reached inhabited areas.
And healthy Nature can also help control the spread of disease. A study looking into the outbreak of West Nile Virus in the United States in 2002 found that the uneven distribution of cases was in large part down to wild bird diversity. Where there were more kinds of wild birds less people caught the disease. This was down to the fact that the mosquitos that spread this nasty virus among people prefer to feed on the blood of birds. Where there are fewer birds, they turn to other animals to get a meal, including people.
When it comes to what Nature does for us there is perhaps nothing more fundamental than the replenishment and supply of freshwater, all of which is in the end supplied by natural systems. By working with Nature, not only can we get secure supplies of clean water, but often for lower costs that can come with highly engineered approaches. New York City is a case in point. Decisions taken during the 1990s to invest in Nature rather than engineering led to enhanced water supplies being achieved at lower cost than if investments had been made in new filtration plant technology.
These and many other examples confirm how looking after the environment is not only about protecting beautiful places, maintaining balance and conserving resources, it is about keeping the economy going, and the evidence to confirm that fact accumulates every day. In the face of this, the steps being taken to cut the budget of the United States Environmental Protection Agency could not be more shortsighted or wrong-headed.
While ideology is a necessary part of politics, in this instance posturing could trump reality to the point where the Bill’s backers are on course to achieve the direct opposite of what they appear to want.
The debate about environmental spending is not only about cost, but also how to make sound investments in the natural systems that will be increasingly essential for sustaining growth and competitiveness into the future. Leading companies and economists increasingly recognize this important truth and the politicians would do well catch up, and fast.
This article was first published by The San Francisco Sentinel.