Costs of Forest Loss “Dwarfs Bank Crisis”
Attention has been focused on the financial crisis recently. Yet a study headed by a Deutsche Bank economist concludes that the annual costs of forest destruction is between $2 trillion and $5 trillion. So while Wall Street has lost between $1-$1.5 trillion, we are losing "natural capital" at a rate of $2 to $5 trillion every year
This number reflects the loss of essential services that forests provide such as water retention and filtration, erosion prevention, and carbon sequestration, and the costs of providing replacement services. In other words, the costs of building reservoirs and water treatment facilities, farming food and fuel sources that were once naturally available, and engineering carbon sequestration facilities.
Because low-income populations, particularly in developing countries, depend most directly on forests for their livelihoods, these costs are disproportionately borne by the world's low-income and indigenous communities.
While forests and biodiversity have intrinsic value beyond the services they provide humans, in a world in which worth seems to be measured exclusively in dollars and regulation centers on the creation of market incentives, quantification of the value of forests may be a useful conservation tool. We can't afford not to try it.