The ecology of economics


In this issue's feature article, Deanna Donovan, JNCC's Environmental Economics Adviser, details why nature conservation has an important role to play in helping to solve the current economic crisis


What does economics have to do with ecology?  If not outright questions, then certainly I get the looks. Both economics and ecology come from the same Greek root ‘oikos’, meaning house or household. Whereas ecology refers to the science or knowledge of the household - understood in the broadest sense as our environment - economics is about its management. And management is about making choices. So, to the extent that our choices reshape our environment and affect all living things in the environment, as well as our social and economic development, in fact economics and ecology are very much related as we are Sherwood Forest National Nature Reserve attracts 400,000 visitors every year. © Ed Mountford/JNCCincreasingly coming to realise in these times of economic crisis.


Over the past year the economy has taken some severe knocks, basically as a result of imprudent decisions of an ambitious few in the financial sector. Threatened with the collapse of the banks, which provide the credit which lubricates commercial activity, government stepped in to the rescue. By selling government bonds it generated the capital needed to prop up the banks and keep the economy afloat, and committed to repaying these borrowed funds with interest in the coming years. With government income, mainly tax revenues, falling as a result of a depressed economy and demands on government-supported social services - unemployment benefits, education payments, health services, among others - increasing for the same reasons, government at all levels is feeling the pinch. Significant cutbacks in government programmes are probably inevitable if the government is to restore fiscal health.


Historically conservation programmes have proved to be an easy target in times of government financial stress. Natural resources may be overexploited in times of economic hardship as departments looking for cash seek to liquidate assets, with many people perceiving the natural environment as an open access resource free for the taking, and collecting what they can from the wild.


From the administrators’ perspective, environmental protection and restoration may seem to be something that can be easily limited or postponed, especially in the face of the competing demands of social services. Too often it is forgotten that ecosystems and their goods and services underpin virtually all economic activity, if not directly then indirectly. The contribution of biodiversity to human welfare and economic development, for example through innovations based on physical, chemical and functional characteristics of various species, is often ignored. The new fields of bio-mimicry, bioremediation, and ecological engineering provide us with some of our most exciting new materials and environmentally advantageous solutions. Despite last year’s widespread publicity of the anniversary of Charles Darwin, the father of evolutionary theory, his observations on the natural world’s adaptation to environmental change seems slow to permeate general thinking. A healthy environment with its diverse constituents having evolved and adapted over time to changing environmental conditions and a succession of diverse pressures, is a prime example of the adaptive capacity we need to help tackle climate change and a faltering economy.


Operating at the science-policy interface, JNCC has an important role to play in elucidating the potential for creating an institutional environment which will permit natural organisms to do, in effect, what they were built for.  Environmental economists involved in The Economics of Ecosystems and Biodiversity (TEEB) international initiative and the UK’s National Ecosystem Assessment (NEA), among others, are working to show what enormous benefit a healthy natural environment rich in biodiversity can contribute to human welfare and social progress, through a variety of ecosystem goods and services. Although a relatively small organisation, JNCC, with its broad range of scientists from diverse backgrounds, takes a panoramic view of environmental challenges, exploring the linkages between sectors and across disciplines.


Although economic recession is nothing new, and probably never to be unexpected, the present economic crisis has a particularly dramatic twist given climate change, perhaps the most significant environmental challenges of our times and, indeed, beyond. Facing the twin threats of climate change and economic recession, it is not surprising that government seeks to tackle these issues in tandem. It would behove us, however, to beware of the hubris of depending too much on hard-engineered solutions to the detriment of the natural environment.  Looking to enhance its impact through strengthening international collaboration, JNCC has an important role to play in communicating to a widening audience the role and value of biodiversity and nature conservation in addressing the key economic, as well as environmental, issues of the day.