Cost of Forest Loss Exceeds Current Banking Crisis

by Janet Ritz

An EU study has concluded the economic impact of world forest loss exceeds the current banking crisis. The study by economists, which quantified the vital services the worlds' forests provide (absorbing carbon dioxide, cleaning water...), places the cost of the disappearing forests between $2 and $5 trillion per year.

The global economy is losing more money from the disappearance of forests than through the current banking crisis, according to an EU-commissioned study... study leader Pavan Sukhdev emphasised that the cost of natural decline dwarfs losses on the financial markets.

"It's not only greater but it's also continuous, it's been happening every year, year after year," he told BBC News. "So whereas Wall Street by various calculations has to date lost, within the financial sector, $1-$1.5 trillion, the reality is that at today's rate we are losing natural capital at least between $2-$5 trillion every year."

The report cites the advantages forests provide as basically free and points out that, without them, the services will either have to be provided through costly technology or through the increasing cost and consequences of growing climate change (which will fall disproportionally upon the world's poor).

"Times have changed," Sukhdev explained, "almost three years ago, even two years ago, their [governments and business] eyes would glaze over. Today, when I say this, they listen."

Several countries have begun efforts toward forest conservation. Ecuador has gone so far as to enact laws that proclaim their trees and water have specific rights to life.

A review is set for completion by 2010 to coincide with the "date by which governments are committed under the Convention of Biological Diversity to have begun slowing the rate of biodiversity loss."

Published on Reuters, The Huffington Post