Pushpam Kumar is the Chief Environmental Economist at the United Nations Environment Programme (UNEP). In this interview, he explains the concept of trade-off analysis and the use of a trade-off paradigm in navigating the complex relationship between humans and nature.
What is trade-off analysis?
Trade-off analysis considers both the positive and negative impacts of human interventions on nature and observes the ways a situation changes when there is more of one thing and less of another.
How is trade-off analysis relevant to discussions of COVID-19?
Every crisis provides the opportunity to learn.
The outbreak of epidemics like COVID-19 reveal the fundamental tenets of the trade-off we consistently face: humans have unlimited needs, but the planet has limited capacity to satisfy them.
COVID-19–a virus that has been attributed to human interferences such as deforestation, encroachment on animal habitats and biodiversity loss–has led to a reported thousands of deaths in China. The subsequent lockdown of Hubei province contributed to a reduction in pollution that, according to a Stanford University researcher, may prevent 50,000 to 75,000 people from dying prematurely. This demonstrates a trade-off between consumption-driven society (and its interference with nature) and the resiliency of nature and ecosystems.
Regardless of its cause or origin, the emergence of COVID-19 has underscored the mutually-affective relationship between people and nature. Now, we must try to understand and appreciate the limits to which humans can push nature, before the impact is negative. Those limits must be embraced by our consumption and production aspiration.
How can trade-off analysis be used to address COVID-19 and in anticipation of similar crises?
A strong collaboration of science–including economics, natural sciences, zoology and ecology–should identify, assess and quantify the losses and gains across stakeholders over the present and future. Given the variety and intensity with which nature and humans impact each other, this is critical for informing decisions that may produce conflicting outcomes–when, for example, potential outcomes are both positive and negative. Specifically, a trade-off analysis would:
- identify stakeholders engaged in making specific choices and decisions where nature and economy are going to be impacted
- estimate potential gains and losses for various stakeholder groups
- determine the role of private and public stakeholders
- anticipate how existing national and global governance structures may influence outcomes
Such robust research enables economists to identify both the benefits of reduced pressure on nature and the economic costs; while natural scientists elaborate the biological and health system factors affecting economic gain or loss.
We already know that the benefits of anthropocentric pressure on planetary boundaries are far fewer than the potential costs to society, in both the short and long term. Ultimately, lost ecological infrastructure and decline of natural capital, including human health, causes a decline in inclusive wealth. The impact of nature trade-offs is even more acute for lower- and middle-income countries, where achieving development goals like reducing poverty and inequality are already a challenge.
Decision makers must carefully evaluate the potential impacts of trade-offs–considering who will gain or lose, and how–and draw on collective wisdom to determine the next steps in the challenges we face today.
Read the original article on unenvironment.org.
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