Benn signals support for biodiversity pricing

Hilary Benn will today call on the international community to develop a mechanism for pricing biodiversity similar to those being used to price carbon emissions, arguing that such a move provides the best hope of reversing the increasingly rapid loss of species that many scientists increasingly regard as the world's "sixth great extinction event".

In a speech this evening to the centre-left think tank Progress, the environment secretary will warn that governments and wider society have been guilty of ignoring biodiversity loss and underplaying its potential consequences.

"Biodiversity is being wiped out with certain species becoming extinct at one thousand times the normal rate," he will warn. "Our planet may be going through its sixth great extinction event, but you would not know it to read today's headlines."

He is also expected to propose that pricing biodiversity will provide firms with a clear financial incentive to limit their impact on species and the so-called ecosystem services they deliver in the form of clean air, water, soil, food and other natural resources.

Speaking in an interview with The Guardian yesterday, Benn said there was a growing case for reforming the way governments tackle biodiversity loss. "We have got the Climate Change Act, which means that, for the first time, the carbon consequences of the decisions we make have to be taken into account by government, and so the next thing is to do that in the same way with the natural world," he said, adding that the UN should also form "a biodiversity equivalent of the Intergovernmental Panel on Climate Change" to inform biodiversity policy.

Benn pointed to research currently being undertaken by Deutsche Bank economist Pavan Sukhdev that is designed to mirror the Stern Review into the impact of climate change by measuring the economic costs of species loss and exploring mechanisms for managing biodiversity risks and accurately pricing biodiversity impacts.

The report - which is being co-funded by Defra and is due later this year ahead of a key international summit on biodiversity to be held in Japan - is also expected to provide guidance for businesses and policymakers on how to measure and disclose their impact on biodiversity, as well as examples of how businesses have effectively limited their contribution to ecosystem damage.

Benn said the government would have to think about the "most effective mechanism for taking account of the economic impact of decisions we make in relation to biodiversity", but insisted that such measures would be vital to tackling biodiversity loss.

He cited the example of how shipping firms using the Panama Canal have invested in reforestation projects on either side of the canal as evidence of how such schemes could work, noting that the reforestation projects are helping to tackle increases in insurance premiums that have resulted from the growing risk associated with reduced water supplies in the region.

Biodiversity pricing is becoming an increasingly popular policy proposal in political circles, with the Conservatives also outlining similar plans in recent months based around conservation credits that could require developers to invest in biodiversity projects.

Environmental groups remain divided on the issue, with some warning that putting a price on biodiversity would inadvertently make it easier for businesses to develop an area, as long as they were willing to pay the resulting fee.

Benn also questioned the Conservative party's ability to make good on its environmental policy proposals, noting that a recent survey of 141 prospective Tory candidates found that climate change ranked bottom of a list of issues that concerns them.