It’s time to recognise our economy is embedded in nature 

Ahead of this week’s G7 Summit the world-renowned economist Professor Sir Partha Dasgupta called for a new global institution, similar to the World Bank or IMF, that would manage the global commons – the aspects of our natural environment that no one owns such as the oceans and biodiversity.  

Charles Thody Wildlife Images

We have yet to see whether international leaders gave this idea the consideration it deserves and how they will respond to the findings of the Dasgupta Review published earlier this year, which is widely seen as a seminal work on the economics of nature.  

Closer to home, there are opportunities to make progress on these important issues. The SNP stated in their manifesto for the Holyrood elections that in “the first six months of the next parliament we will deliver a new 10 year National Strategy for Economic Transformation”. The clock is already ticking on this commitment. If it is to fulfil its grand ambition then the Scottish Government must take Dasgupta’s findings to heart and recognise that our economy is embedded in nature. 

“If it is to fulfil its grand ambition then the Scottish Government must take Dasgupta’s findings to heart and recognise that our economy is embedded in nature.”

Not only do we need to transform the way we manage the global commons but we must also ensure that we do this at the national level, and prevent our demands on nature exceeding supply by investing in nature-based solutions. In addition, we must redefine our measure of economic success to be one that includes the natural assets that are vital for our well-being now and in the future.  

For hints on how to apply this thinking in Scotland, the Scottish Government need look no further than the advice of its own independent Advisory Group on Economic Recovery. In a report last year this group set out that government “should consider adopting a Four Capitals framework in forming its future economic strategy, and reporting against it”, where the four are natural, human, social and economic capital. While the Scottish Government has accepted this advice, its initial response was lacking in detail and new initiatives.  

With a new parliament comes new opportunities. There is still time to get this right, although time is running out to take meaningful action to avert the climate and biodiversity crisis. As Sir David Attenborough commented “by bringing economics and ecology together, we can help save the natural world at what may be the last minute – and in doing so, save ourselves”.  

The Scottish Government could do worse than look to New Zealand, its partner in the Wellbeing Economy Governments partnership. Their Living Standards Framework has the four capitals at its heart. Drill down into the detail of the monitoring framework and biodiversity is one of the key indicators for assessing trends in natural capital.  

With COP26 in Glasgow just months away, Scotland has an opportunity to show the world how to take a holistic approach to managing our economy and put nature at the heart of the new economic strategy. What better way to do this than by setting legally binding targets for biodiversity which will reverse the decline in nature we have caused. As Dasgupta points out Adam Smith, considered by some to be the founding father of economics, considered the Wealth of Nations, not their GDP.  

What could be more fitting than having the country of Smith’s birth lead the way in developing a more inclusive and holistic measure of wealth, and commit unequivocally to reversing the decline in biodiversity. 

Dougie Peedle, Head of Policy 

This article was first published in the Scotland on Sunday 

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Preface

Ahead of this week’s G7 Summit the world-renowned economist Professor Sir Partha Dasgupta called for a new global institution, similar to the World Bank or IMF, that would manage the …

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