It’s important for business and government to recognise that biodiversity and climate change are linked. But this article in The Economist says that many business leaders still regard biodiversity as a “nice-to-have luxury that is far beyond their remit.”
However, The Economist article also tells us that, each year, more than a quarter of the carbon dioxide emitted by industry and agriculture is absorbed by natural ecosystems. So as we continue to destroy nature, we reduce the earth’s capacity to absorb the carbon that we create, which is over and above what the earth produces naturally. To make matters worse, with climate change comes increased pressure on nature and its ability to adapt and survive.
In recent years, we’ve seen severe climate-related disasters across Australia in the form of fires and floods. These events have had a huge impact on buildings and infrastructure. Unfortunately, for those affected by these severe weather events, this has included the loss of the family home. These climate related disasters have also caused native wildlife to lose their homes as well. It’s hard to forget that 3 billion animals lost their lives during the fires in 2019, or the fact that 8.3 million hectares of native forest habitat were lost.
Recognising the intrinsic link between biodiversity and climate change is essential to taking action. Indeed, rather than biodiversity being a luxury, a key part of the solution to climate change is investing its restoration and protection.
Financial accounting is used to estimate the investments required to replace the losses of buildings and infrastructure. We can use natural capital accounting to help assess the investment needed to replace the loss of nature.
As natural capital accountants we use spatial data to recognise that each area of nature is an asset. We then measure its condition and, from there, we can understand the services and benefits it provides – like how much carbon it absorbs, how it cleans the air and how it supports the supply of clean water.
This baseline of information, including a record of past trends, allows us to understand which areas are healthy and functioning well and which are more vulnerable and in need of restoration. In addition, natural capital accounting describes the costs and benefits to people, businesses and communities that arise when the environment changes. When this baseline data from accounts is combined with projections of future changes – including climate change and biodiversity loss – it provides a comprehensive information set that helps governments and businesses decide where to concentrate their efforts. This helps them make decisions about where they should invest in nature.
Can natural capital accounting fix the effects of climate change or biodiversity loss? Not on its own. But coherent information must be an essential part of the toolkit. It allows us to recognise explicitly the essential connection we have to nature and highlights that investing in nature, for example through nature-based solutions, can solve both challenges at the same time. In short, natural capital accounting gives us the evidence we need to decide how we’re going to act.
Acting to fix nature in an evidence-based way? That sounds like a good idea.
