$2.2 trillion : the huge costs of environmental damages
The Guardian published last week a most interesting series of articles on a report to be published this year by the United Nations and Trucost which estimates the damages on the environment to $2.2 trillion per year.
To the newspaper ” the activities of the world’s 3,000 biggest companies estimates one-third of profits would be lost if firms were forced to pay for use, loss and damage of environment”
This poses an important question: Are we ready to pay for the damages done to the environment ? This question leads to many others on our societies and economies.
Still to the newspaper :
The report comes amid growing concern that no one is made to pay for most of the use, loss and damage of the environment, which is reaching crisis proportions in the form of pollution and the rapid loss of freshwater, fisheries and fertile soils.
Later this year, another huge UN study – dubbed the “Stern for nature” after the influential report on the economics of climate change by Sir Nicholas Stern – will attempt to put a price on such global environmental damage, and suggest ways to prevent it.
The report, led by economist Pavan Sukhdev, is likely to argue for abolition of billions of dollars of subsidies to harmful industries like agriculture, energy and transport, tougher regulations and more taxes on companies that cause the damage.
Ahead of changes which would have a profound effect – not just on companies’ profits but also their customers and pension funds and other investors – the UN-backed Principles for Responsible Investment initiative and the United Nations Environment Programme jointly ordered a report into the activities of the 3,000 biggest public companies in the world, which includes household names from the UK’s FTSE 100 and other major stockmarkets.
The study, conducted by London-based consultancy Trucost and due to be published this summer, found the estimated combined damage was worth US$2.2 trillion (£1.4tn) in 2008 – a figure bigger than the national economies of all but seven countries in the world that year.
The figure equates to 6-7% of the companies’ combined turnover, or an average of one-third of their profits, though some businesses would be much harder hit than others.
“What we’re talking about is a completely new paradigm,” said Richard Mattison, Trucost’s chief operating officer and leader of the report team. “Externalities of this scale and nature pose a major risk to the global economy and markets are not fully aware of these risks, nor do they know how to deal with them.”
The biggest single impact on the $2.2tn estimate, accounting for more than half of the total, was emissions of greenhouse gases blamed for climate change. Other major “costs” were local air pollution such as particulates, and the damage caused by the over-use and pollution of freshwater.
Here is a breakdown of the sums :
Be sure to read all the related articles as they are worth your time:
- World’s top firms cause $2.2tn of environmental damage, report estimates ;
- Time to clean up: UN study reveals environmental cost of world trade ;
- The price of environmental destruction ? There is none ;
- Putting a value on nature could set scene for true green economy.
I look forward to reading your views on that topic.