On 2 February 2021, the UK Government launched The Economics of Biodiversity: The Dasgupta Review. The UK Treasury commissioned this review to shape the international response to biodiversity loss and push for global action. The report describes the hidden costs of depleting natural capital as a significant constraint for long-term value creation. And calls for action to increase the quality and quantity of our stock of nature and associated biodiversity and demonstrates how doing so will significantly reduce costs immensely than delaying it further. 

The report argues that changing our current measures of economic success into a more inclusive wealth system that measures all capital assets (i.e. human capital, produced capital and natural capital) as the aggregate of measuring a country’s economic success is a necessary step towards returning the world to the path of sustainable recovery and prosperity. 

The review argues that we need to change how we currently act, think and measure success and proposes three broad and interconnected transitions:

 1) Balance humanity’s demand and natures supply

• Nature is an asset, and we have failed to manage our natural capital in a way that maintains resilience and productivity. 
• The quality and quantity of our natural stocks need to increase significantly. 
• Conservation and restoration of ecosystems can have a positive impact on job creation 

2) Changing measures of economic success will lead to a more sustainable pathway

• The review develops the economics of biodiversity on the understanding that our economies and ourselves are embedded within nature and not external to it. 
• Natures worth is not reflected in current market prices.
• An inclusive measure of wealth is needed to determine the risks and rewards businesses may have with interactions with nature. 

3) Our institutions and systems need to change to enable and sustain change

• Financial and educational systems need to change in which global standards are implemented where nature considerations are placed at the forefront. 
• Management and mitigation of nature-related financial risks can lead to increased resilience of balance sheets of financial institutions. 

The report stresses that the transformative changes that it has put forward are possible and are urgently needed and involves the commitment of actors from all levels. For too long economic reasoning has detached biodiversity and nature from its logic, implying that we are external to nature. The fault is not in economics but lies in the way we have chosen to practice it, and it is time that we change our ways of thinking to ensure we reduce the costs we face in the future if we choose not to take action. 

1. Our economies, livelihoods and well-being all depend on our most precious asset, nature. Nature provides us with food, water, shelter, regulates our climate and provide us with spiritual fulfilment and opportunities for recreation and recuperation, which enhances our health and well-being. Nature is an asset, just as produced capital ( roads, buildings and factories) and human capital ( health, knowledge and skills). Biodiversity enables nature to be productive, resilient and adaptable. Just as diversity within a portfolio of financial assets reduces risk and uncertainty, diversity within a portfolio of natural assets increases natures resilience to shocks, reducing the risks to nature's services. Reduce biodiversity, and nature and humanity suffer.
2. Between 1992 and 2014, produced capital per person doubled, and human capital per person increased by 13% globally, but stock of natural capital per person declined by nearly 40%. The imbalance between our demands and nature's supply has lead to a stock imbalance of our natural assets and its ability to regenerate. The loss of such assets are associated with large future costs.
3. Biodiversity is declining faster than at anytime in human history. Current extinction rates are around 100 to 1000 time higher than the baseline rate, and they are increasing. Such declines are undermining nature's productivity, resilience and adaptability , and in turn fuelling extreme risk and uncertainty for our economies and well-being.
4. Many ecosystems, from tropical forests to coral reefs, have already been degraded beyond repair, or at imminent risk of reaching tipping points. These tipping points could have catastrophic consequences for state economies, as it is impossible to coax ecosystems back to health once it has tipped into a new state. Low income countries whose economies are more reliant on nature's goods and services from within their borders, stand to lose the most.
   
5. Nature's worth to society, the true value of goods and services it provides is not reflected in market prices because much of it is open to all at no monetary charge. These pricing distortions have led us to invest relatively more in other assets such as produced capital, while underinvesting in our natural assets. Some aspects of nature are mobile, some are invisible, such as in the soils, and many are silent. These features mean that our actions on ourselves hard to trace and go unaccounted for, giving rise to widespread externalities and making it hard for markets to function well.
6. Food production is the most significant driver of terrestrial biodiversity loss. As the global population grows, the enormous problem of producing sufficient food in a sustainable manner will only intensify. Technological innovations and sustainable food production systems such as precision agriculture, integrated pest management and molecular breeding techniques are likely have a positive economic impacts and create jobs.
   
   
7. To avoid exceeding the limits of what nature can provide on a sustainable basis while meeting the needs of the human population, we cannot rely on technology alone. Production and consumption patterns will need to be fundamentally restructured. Breaking the links between damaging forms of consumption and production and nature can be accelerated through a range of policies that change prices and behavioural norms, such ass re-sue, recycling and sharing, and aligning environmental objectives along entire global supply chains.
8. Nature needs to enter economic and financial decision-making in the way buildings, machines, roads and skills do. To do so ultimately requires changing our measures of economic success. As a measure of economic activity, GDP is needed for short-run macroeconomic analysis and management. However, GDP does not account for the depreciation of assets, including the natural environment. As it is our primary measure of economic success, it, therefore, encourages us to pursue unsustainable economic growth and development. To judge if economic development is sustainable, an inclusive measure of wealth is needed. Measuring our wealth in terms of all assets, including natural assets, would provide a clear and coherent measure of the wellbeing of current and future generations.
   
   
9. Standardisation of data and modelling approaches, and technical support, would make it easier to embed natural capital accounting in national economic accounts, and, above all, use the information to improve decision making at scale around the world.