The Economics of Biodiversity

Throughout history there has often been a blatant separation between environmental preservation and economic growth, suggesting that the two cannot possibly flourish simultaneously. This idea is not only detrimental to both causes, but prevents their cooperation and coexistence to create a sustainable world. In this paper I will address one of the greatest threats to environmental and economic well-being: the loss of biodiversity. In understanding what biodiversity is and its immeasurable value to society, I hope to exemplify the importance in its preservation. While I will touch on the ecological and ethical reasoning for this, my argument will be mainly rooted in economics. With a brief overview of classical economic theory and its approach to environmental problems, the current flaws with the valuation of biodiversity will be evident. A cost-benefit analysis regarding the protection of biodiversity, though imperfect will support the necessity of preserving worldwide species variation. While this paper will be specific in addressing the environmental problem of biodiversity loss, I hope the underlying concepts will expose the importance of creating a sustainable future. Through examinations of current environmental policies and the causes of their successes and/or failures, we can stay on track for this goal. Economic incentives for behavioral modification can undoubtedly be the environment’s biggest ally in its conservation, if utilized correctly. It is the responsibility of policymakers to implement these incentives to maintain environmental health without harnessing economic growth. When policies are ineffective, as will be discussed, the struggle between environmentalists and economics only intensifies. The loss of biodiversity, as well as the countless other obstacles to sustainability, must be addressed as problems in themselves rather than driving forces of interest group agendas or we will certainly suffer a simultaneous collapse of environmental and economic health