Report Delves Into The Potential Benefits Of Pricing Nature In The Brazilian Amazon
S&P Global Ratings highlights the potential of natural capital accounting to promote sustainable farming and combat global deforestation. A study focusing on Brazilian Amazon beef production estimates the cost of nature loss at US$4 billion in 2020, impacting 12% of beef processors' revenues. By valuing ecosystem services, S&P suggests that pricing nature could incentivize forest-friendly practices. The report reveals US$4,741 in annual ecosystem service value per hectare of standing Amazon forest, advocating for integrated nature assessments in economic evaluations.
- Potential to drive forest-friendly farming practices.
- Estimates a significant annual value of ecosystem services for standing forests at US$4,741 per hectare.
- The estimated US$4 billion nature loss cost for Brazilian beef could indicate severe implications for the industry.
DUBLIN, Nov. 8, 2021 /PRNewswire/ -- S&P Global Ratings said today that natural capital accounting pricing measures could potentially encourage more forest-friendly farming practices and help tackle global deforestation, a major issue in the fight against climate change (see Natural Capital Valuation: An Incentive To Protect Nature? published today on RatingsDirect.
Using beef produced in the Brazilian Amazon as a case study for pricing nature in nature-dependent supply chains--noting that beef production is a key driver of deforestation in the region--S&P Global Ratings estimates a hypothetical cost of nature loss for Amazonian-sourced beef of US
"Valuing nature is something we do without thinking, but going one step further and putting a price on nature could be a way to help protect it," said sustainable finance analyst and lead author, Maurice Bryson.
"Using ecosystems services valuations to gauge the potential value of nature loss when a hectare of the Amazon is deforested, and then using this natural capital valuation assessment to more accurately assess the externalized cost of nature loss could help stem the decline in nature," Mr. Bryson added.
The data indicate that a hectare of standing forest in the Amazon creates US
Ascribing value to a standing forest is not without its challenges. By assessing the services that intact nature provides--ecosystem services--and then putting a value on these, which can come from calculating how much it would cost humans to replicate nature's services, incorporating nature into the assessment of wealth becomes more tangible.
This report does not constitute a rating action.
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SOURCE S&P Global Ratings
FAQ
What is the focus of the S&P Global Ratings report released on November 8, 2021?
What is the estimated cost of nature loss for Brazilian beef in 2020 according to S&P?
How much value do standing forests in the Amazon provide annually as ecosystem services?
What percentage of Brazilian beef processors' revenues was affected by nature loss in 2020?
