Sustainable Prosperity

The Impact of Deforestation on Biodiversity and Global Warming

Deforestation plays an important role in both global warming and the loss of biodiversity. The destruction of tropical rainforests, especially in the Amazon basin, is particularly serious. These forests are home to a large proportion of the world's animal and plant species. They could become a decisive factor in curbing global warming.

The Wealth Approach of Economist Partha Dasgupta

There are optimists who, thanks to the development of new technologies, are confident that the economy can and must grow in a sustainable, environmentally and climate-friendly way. Others claim that there is no such thing as unlimited growth without destroying the natural foundations of life. With a view to protecting the earth, they therefore call for growth to be limited or even for economic output to be reduced. Who is right?

One approach that could help to answer this question is the wealth approach of British economist Partha Dasgupta. He proposes that an intact environment should be seen as capital that provides valuable services in a similar way to human-created capital - in the form of machines or houses. The most frequently cited example is the pollination of flowers by bees. The production of food through fishing and agriculture, the extraction of groundwater, the absorption of CO2, the provision of recreational areas for people and, last but not least, protection against epidemics and other health risks.

From this perspective, sustainable development requires that natural capital does not shrink permanently, but is at least preserved. To achieve this, the ecological footprint, i.e. the consumption of natural capital, must not exceed the natural regenerative capacity of this capital. According to estimates by the Global Footprint Network, the global ecological footprint is currently 1.7, i.e. 170 percent of what would be compatible with the preservation of natural capital. These estimates are methodologically difficult and controversial: they may overestimate the problem, but they may also underestimate it.

Possible Solutions for Sustainable Development

Let's assume that the value of 1.7 is correct. What changes would be necessary to achieve sustainable development? For a given gross domestic product, the efficiency of our economy in terms of the consumption of natural resources per unit of gross domestic product would have to improve massively: We should only consume two thirds of what we use today. This applies worldwide. If the economy continues to grow, the need to increase efficiency in order to reduce the consumption of natural resources will also continue to rise.

How can such a change be achieved? Through...

1.  ...technical innovations that can reduce the consumption of natural capital through the production of goods and services. This includes switching the energy supply to climate-neutral technologies, manufacturing fully recyclable cars and other machines, and much more.
2.  ...progress and innovation in the organization of economic and social processes: better monitoring and enforcement of environmental protection rules and intelligent environmental protection policies that avoid unnecessary cost burdens, such as tradable certificates for greenhouse gas emissions.
3.  ...direct investment in natural capital; for example, reforestation and the designation of nature reserves. The protection of the remaining tropical rainforests is of paramount importance.

Another important prerequisite is the appropriate measurement and monitoring of natural capital, accompanied by appropriate communication.

Environmental Protection Measures Are Difficult to Implement: Own Benefits Weigh More Heavily

One of the reasons why it is difficult to achieve all of this is that decisions on environmental protection are primarily made by national governments. While this is a sensible approach for local environmental problems, national governments have only limited incentives to take on the costs of environmental protection if the benefits accrue worldwide. However, highly developed countries such as Germany can still make a contribution by participating in international agreements on climate and environmental protection. It is also important to develop environmentally friendly technical solutions that are attractive regardless of their environmental impact and are therefore also adopted in countries where other problems are prioritized over environmental sustainability.

Another, less promising approach to reducing the ecological footprint would be to reduce the global gross domestic product or at least to refrain from further growth. This is the path favored by the so-called degrowth movement. This demand poses considerable problems. Inhabitants of developing and emerging countries in particular will not refrain from achieving greater prosperity. Even in high-income countries such as Germany, a policy of shrinking will hardly find political support. In addition, the willingness to use resources for environmental protection tends to decrease when material prosperity declines. If people voluntarily refrain from consumption that pollutes the environment as a result of a change in awareness or education, that is a different matter. However, such changes in behavior have so far been the exception. That is why a focus on technical and social progress towards environmental protection, combined with investment in the regeneration and preservation of natural capital, is the more promising path to sustainable prosperity.