Biodiversity: what’s it worth to you?

Lemme guess: you stick it in your ear

In Introducing tobacco to civilization, Bob Newhart imagines a telephone conversation between Sir Walter Raleigh and his London office.

Walt explains that his latest discovery is a leaf. The guys in the office know he’s nuts, so they kindly tell him that in England they have quite a few leaves already. But Walt explains that in the American colonies, they’ve got this leaf they shove in their mouths and set fire to, or stick up their noses and sneeze out again.

The guys think this is hilarious, until Walt tells them he’s bought 80 tons of the stuff. Plus some magic beans called coffee you can boil to drink along with it.

Shortly after Raleigh’s death in 1618, Tulip Mania swept Europe, in what some economic historians call the first speculative bubble. The price of a single bulb reached 10 times the yearly wage of a skilled craftsman, before the bubble burst, which as John Kenneth Galbraith explains in A short history of financial euphoria, they always do.

Anyway, the idea of paying for what nature provides wasn’t weird, and is still the basis of trade in agricultural produce of course . So, in today’s service economy, why not pay for the services provided by biodiversity and ecosystems? Apart from food, there’s clean water, genetic resources, and climate regulation, among many others.

But how do you pay nature? And how can we reverse the worrying loss in global biodiversity?

Voluntary agreements called Payments for Ecosystem Services are one way. In a PES, a user or beneficiary of an ecosystem service pays farmers, foresters, or fishers for the additional costs of biodiversity and ecosystem service conservation and sustainable use, over and above whatever is required by any existing regulations.

There are now over 300 national PES worldwide, mainly concerning biodiversity, watershed services, carbon sequestration and landscape beauty, channelling over $6.5 billion, plus many smaller scale programmes. PES-like mechanisms are also being explored on an international scale through intitiatves like the Clean Development Mechanism and REDD+ (Reducing Emissions from Deforestation and forest Degradation).

A new OECD publication, Paying for Biodiversity, looks at the issues in detail, notably criticisms of the cost-effectiveness of PES.

Useful links

OECD work on green growth

OECD work on biodiversity management

Sleek, polished and sexy

Atomic batteries to power, turbines to speed, underpants over tights.

The grooviest car I ever owned was an Aston Martin DB5, as driven by James Bond. My brother preferred the Batmobile, but for me, machine guns and an ejector seat outweighed the kudos of muttering “atomic batteries to power, turbines to speed” before you zoomed off across the carpet.

So I was pleased to see that Aston Martin has just been voted the coolest brand in Britain, while the Caped Crusader doesn’t get a mention among the 500 names listed, not being sleek, polished and sexy.

The list is interesting for other reasons too. It’s dominated by stuff like watches that are waterproof to a depth where whales implode, expensive ice-cream, fancy phones, and the like. Practically none of the top brands actually make anything you really need. (The Plain People of Blogland, spluttering fair trade coke all over their Facebook wall: Criminey, dude, my iBerry has literally saved my life a million times this week already!)

You could object that the cool list is purely subjective and doesn’t really say much about how important these firms actually are. Another list, drawn up by Forbes magazine, ranks firms by their assets. Unlike the cool brands list, practically none of Forbes’ top 100 companies make anything, apart from money, and some of them, such as RBS,  have failed spectacularly to do even that.

And yet,  nine of the top ten have assets valued at around $2 trillion or more. To put that in perspective, only seven countries in the world had a GDP of $2 trillion or more in 2008 before the worst of the recession hit, including the UK, with a GDP of $2.6 trillion – almost a trillion less than the assets of RBS, the bank British taxpayers bailed out. So most of these assets were probably worthless at best, and some were probably liabilities.

What’s the link between these lists? All the firms featured are highly innovative in one way or another. And they illustrate how increasing wealth means the economy can shift away from supplying the basics to fulfilling desires to fuelling fantasies.

How long can it last though? There are disturbing parallels between what happened in financial markets and what’s happening in the world’s ecosystem. The financial crisis didn’t come out of the blue. There were warnings not to assume that asset values would rise indefinitely. There are warnings that natural resources and the services provided by nature are not infinite.

When the financial system crashed, the living standards of millions of people dropped. But governments stepped in to save the day, and the economy has started to recover. If the natural systems our wellbeing depends on crash, through climate change, biodiversity loss or whatever, nothing will save them.

That’s one reason the OECD has launched a “green growth strategy”. If we want to make sure that the progress in living standards we’ve seen these past fifty years doesn’t grind to a halt, we have to find new ways of producing and consuming things. And even redefining what we mean by progress and how we measure it.

Useful links

OECD work on sustainable development

OECD work on innovation

Education, income and social factors

Obesity is not just about weight. It is associated with chronic conditions that are costly to treat, such as heart disease and diabetes. Since the 1980s, obesity has risen right across the OECD area, and has begun to emerge in poorer countries too. Preventive action is needed, but to be effective, policymakers have to understand the causes and characteristics of what, for many healthcare professionals, is nothing less than an epidemic. Obesity and the Economics of Prevention: Fit not Fat, a new OECD report, examines the causes and costs of obesity, and highlights some of the social and cultural factors that must be taken into account. (more…)

Do blondes have more fun? An OECD expert replies

Calibrating the OECD "Society at a Glance" Funometer (TM)

Today’s post is contributed by Maxime Ladaique from the OECD directorate of Employment, Labour and Social Affairs.

I know how hard it is to wait for World Statistics Day on 20 October (20102010, get it?), so today I’m going to tell you about some particularly interesting statistics: in which OECD country people are most satisfied with their life, and why these people are happier.

And if you don’t mind, I’m going to make you work a little bit. I would like you to think of a number from 0 to 10, but not a random number: a number measuring your current level of life satisfaction.

Zero means you’ve got a bad case of the blues. In fact, if you chose 0, I don’t think you should be reading this blog. Maybe you should be with your family, or consulting a doctor.

10 means you couldn’t feel better. I’m not sure there will be any “10s”, unless you are reading us from a beach or a yacht in the Caribbean.

Anyway, this is how US poll company Gallup collects data on levels of life satisfaction in 150 countries around the world – and we use these data at the OECD.

OK – You all have your number ready?

Do you think you feel happier or less happy than other people?

Well, on average across OECD countries, people report a level of life satisfaction of 6.7. People from the UK, Canada, New Zealand or from France report – on average – slightly higher levels than the OECD average, between 7 and 7.5.

Countries with the lowest levels of life satisfaction are some eastern European and Mediterranean countries – Hungary, Slovak Republic and Turkey – at around 5.

And countries with the highest levels are the Nordics. Yes, you know: those blonds!  First Denmark, then Finland – at almost 8!

So what’s their secret? How do the Nordics manage to be satisfied? Is it the cold weather? Is it the pickled herrings? Or do blondes really have more fun?

Not really. I’ll tell you two main reasons.

First, these countries perform quite well economically. They are among the richer OECD countries, and people in richer countries report higher levels of life satisfaction.

But, you ask, what about the United States, one of richest countries: why are Americans not reporting higher levels of life satisfaction on average?

This is because although it’s rich, there is a lot of inequality in the levels of life satisfaction. There are many people reporting high levels of life satisfaction and many reporting low levels.  People tend to feel better, on average, in countries where there is less inequality, such as the Nordics, where governments help the population by redistributing money from the rich to the poor – which could explain why they feel better on average.

Finally, you may also be interested to read that – overall – there is no difference between women and men in reported levels of happiness, but we are happier:

  • as we get older- up to the mid 70s, this is when health problems start getting more serious
  • when we have a job – yes, work is good for you!
  • when we are married
  • when we socialize with other people.

And of we are also happier when we read interesting texts and get more knowledge, as you are hopefully doing right now.

If you felt happy reading this, there’s plenty more where that comes from in Society at a Glance: OECD Social Indicators.

And thank you OECD Insights blog for keeping our level of happiness up!

Useful links:

World Statistics Day at OECD

OECD Social Policy division