Valuing Nature - Review of the 'Economics of Biodiversity'

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School of Business | Bachelor's thesis
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Date
2022
Major/Subject
Mcode
Degree programme
Taloustiede
Language
en
Pages
24
Series
Abstract
Contemporary economic models that guide our decision making, are not sufficiently considering the value of nature. Undervaluing nature results in unsustainable economic action, ultimately diminishing future generations' economic possibilities. Our unsustainable management of nature’s resources in the process of maximizing GDP has led us to being at a high risk of disrupting Earth’s systems irreversibly, which would have catastrophic consequences to humanity. This literature review discusses the valuing of nature and the role of natural capital in economic analysis. I seek to answer the question of how we should measure the value of nature and why is this important. I show that our impact on nature is significantly larger than the Earth can handle. I argue that we should use inclusive wealth as an indicator of economic progress to include nature and the well-being of future generations in our decision making. To examine this vast subject, I mostly follow the comprehensive review done on the subject by P. Dasgupta supported by other literature.
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Thesis advisor
Vehviläinen, Iivo
Keywords
biodiversity, ecological economics, ecosystem services, inclusive wealth, natural capital
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