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Sunday, April 19, 2009

Environmental Destruction Could Cost World $5 Trillion -- Each Year

$700 billion?

That's nothing compared with the $2 to $5 trillion per year ecological damage costs the world each year, according to the preliminary report from an European Union-sponsored group of economists.

The calculation attempts to value the services, such as absorbing carbon dioxide and nitrogen fixation, that natural systems like forests provide for humans.

"So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today's rate we are losing natural capital at least between $2-$5 trillion every year," Pavan Sukhdev, a Deutsche Bank economist and the study's leader, told the BBC today.

The Economics of Ecosystems and Biodiversity report uses a similar methodology as the Stern Review, a landmark report by British economist Nicholas Stern, which argued that the cost of doing nothing about climate change outweighed the costs of even strict CO2 mitigation measures. A landmark Nature paper in 1997 estimated the value of the world's ecosystems at somewhere between $16-54 trillion dollars. This type of accounting, in both its general thrust and detail, has been criticized by some economists.

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The Painting is by Henri Rousseau

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