Conservation Biology, finance and Nauru

John Gowdy and Lisi Krall draw the wrong lessons from the recent history of the small island nation of Nauru in The fate of Nauru and the global financial meltdown, published, as so much financial commentary these days, in the journal Conservation Biology.

Gowdy and Krall's story goes like this. The current economic system of the world, including Nauru, is market capitalism. Phosphate mining savaged the paradisiacal island of Nauru and deprived Nauruans of their traditional living means. While there was still some phospate on the island the government of Nauru decided to put part of the revenues in a trust fund. Neoclassical economists think this - transforming natural resources into investments - is good. But the fund, once worth one billion Australian dollars, is now gone due to the vagaries of financial markets. "The people of Nauru face a bleak future with no source of income other than foreign aid."

Gowdy and Krall draw three conclusions. First, market capitalism is no good. Second, neoclassical economists are evil or at least plain wrong. Third, because neoclassical economists are wrong, David W. Orr is right.

In contrast, I draw this conclusion: Don't trust your finances to your government.

Conservation Biology and financial reform

Conservation Biology, a journal officially devoted to "the study and preservation of species and habitats," has opened its pages to finance reform proposals. David W. Orr writes (in his article Shelf life):

[W]e ought to build a slower economy. [...] It would require buyers, for example, to hold stock for, say, 6 months before they could sell.

Although Orr is very worried about the upcoming end of the world, this is the only specific proposal he offers in order to avert it - at least in this article. He says nothing, for example, about the possibility of requiring lovers to remain together for, say, six years before they can break up.

Environmentalism, self-hate and money-giving

If you make people hate themselves they will donate more money to your cause.

Impact of biological invasions in Europe

In the Science article Will threat of biological invasions unite the European Union? Philip E. Hulme, Petr Pyšek, Wolfgang Nentwig and Montserrat Vilà write:

Even the crudest estimate of total known monetary impact of alien species in Europe is close to €10 billion (about U.S. $13 billion) annually (European Commission, Towards an EU Strategy on Invasive Species; COM(2008) 789, EC, Brussels 2008). This figure is an underestimate, as potential economic and environmental impacts are unknown for almost 90% of the alien species found in Europe.

I checked Towards an EU Strategy on Invasive Species and this report refers to another report [Kettunen, M., Genovesi, P., Gollasch, S., Pagad, S., Starfinger, U. ten Brink, P. & Shine, C. 2008. Technical support to EU strategy on invasive species (IS) - Assessment of the impacts of IS in Europe and the EU (Final module report for the European Commission). Institute for European Environmental Policy (IEEP), Brussels, Belgium. 40 pp. + Annexes, May 2008, (DG ENV contract)] that I am unable to find using Google and searching the IEEP. But the summary in Towards an EU Strategy on Invasive Species indicates that the €10 billion is not the "total known monetary impact of alien species in Europe" but only their costs (such as eradication and control, agricultural and forestry damage, loss of commercial fisheries, damage to infrastructure and damage to human health). Total impact should include the benefits of invasive species.

Costs of a specific agency such as [the proposed] European Centre for Invasive Species Management, if run on a budget similar to European Centre for Disease Prevention and Control's, would amount to less than 0.5% of the annual cost of biological invasions in Europe but could bring much greater dividends to the European economy and environment.

Could.

[Update: Rodolphe E. Gozlan and Adrian C. Newton make the same point.]