Biodiversity and National Accounting

Biodiversity, a property of natural
areas, provides a range of benefits to the economy including
bioprospecting rents, knowledge and insurance, ecotourism
fees, and ecosystem services. Many of these values can be
broken out in the System of National Accounts, leading to
better estimates of the economic losses when natural areas
are degraded or destroyed. Developing countries harbor the
great majority of biodiversity, and this diversity provides
benefits, including knowledge and carbon sequestration, to
the whole world. However, protecting biodiversity is
particularly costly for developing countries: the
opportunity cost of foregoing development of natural areas
exceeds 1 percent of gross domestic product in 58 developing
countries, versus only four OECD countries. The Global
Environment Facility can offset these costs through grant
finance, but annual Global Environment Facility finance and
co-finance averages only 8 percent of the opportunity costs
faced by low-income countries.