The Biosphere Economy

The Biosphere Economy: Natural limits can spur creativity, innovation and growth es una publicación de Volans, B4E (Business for Environment Global Summit) y Tellus Mater Foundation

Almost 200 years ago, Thomas Newcomen built the world’s first commercially successful steam engine— to pump water out of deep coalmines.

In the process, he handed humanity the keys to the Earth’s fossil fuel resources, an event which in turn helped fuel the Industrial Revolution. Ever since that moment, the natural world has been in retreat, equally undervalued by economists, accountants, engineers and politicians. Now, however, a new revolution is under way, once again ignited by resource constraints—but this time with economists and accountants leading the charge, alongside activists, engineers, scientists, business leaders and, eventually, politicians.

Take Pavan Sukhdev, former managing director of the Markets Division of Deutsche Bank—who later in 2010 will launch the findings of the TEEB study,1 the acronym standing for ‘The Economics of Ecosystems and Biodiversity’, an initiative of the United Nations Environment Programme (UNEP). The focus of his work—and of a growing number of economists—is the creation in the coming decades of what we will call here the ‘Biosphere Economy’. And the evidence suggests that this will be as profound in its impacts as the original Industrial Revolution, with the critical difference that this time that the economy will be working with the grain of the biosphere, rather than against it.

The financial value at stake is mind-boggling— and the business opportunities likely to be created by the shift in the prevailing market paradigm are astonishing. The TEEB analysis, for example, concludes that the degradation of the Earth’s ecosystems and biodiversity due to deforestation alone costs us natural capital worth somewhere between $1.9 and $4.5 trillion every year.

Extraordinary new insights are flowing from the leading edge of ecosystems science. Today we understand, for example, that tropical rainforests act as freshwater pumps. The Amazon generates and pumps into the atmosphere some 8 trillion tons of water a year, feeding into an aerial belt of water vapor that connects tropical forests across the globe. Cut down the Amazon, we are told, and rainfall will decrease from South America to Tibet, generating (to take just one example) water scarcity in Brazil, where the energy supply sector is 70% dependent on hydropower.

Conserving the Amazon is therefore not just a matter for conservationists, but a strategic issue for the companies whose operations make up the $1 trillion agricultural industry in southern Brazil and Argentina. Indeed, the emerging business case for investment in ecosystem services promises to be significantly more engaging for business leaders than earlier emotional appeals to protect biodiversity.

Enter the Biosphere Economy, a future where business-as-usual and politics-as-usual increasingly take account of natural capital and related forms of value, bridging the gap between man-made assets and nature’s ecological infrastructures that underpin our economies and societies.

Around the world, a growing array of innovators is experimenting with possible solutions. They range from earth scientists co-developing investment ratings for companies through to technology firms creating open-source mechanisms to track the state of the biosphere. We plan to map and engage a growing number of these innovators and entrepreneurs, helping crossconnect them with each other—and with the mainstream business, financial and public sector players they must now engage.

The four business trends spotlighted in this short brief—relating to leadership, finance, operations, and innovation—are shaping an agenda for those in Boards and C-Suites.

As a first step in our work on the pathways to scale of the Biosphere Economy, we are delighted to be engaging leaders from the private, public and citizen sectors at the 2010 Business for Environment (B4E) Summit in Korea. It is tempting to say that this is a shared challenge—and a shared opportunity—but history suggests that some actors will recognize the market potential in all of this, way ahead of others. Who will be the Bill Gates of ecosystem services?

Ver The Biosphere Economy completo.