* U.N.-backed report ranks businesses by impact on
* Cattle ranching in South America ranks second worst
OSLO, April 15 Coal-fired power generation in
Asia and cattle ranching in South America are the most damaging
businesses for nature with hidden costs that exceed the value of
their production, a U.N.-backed report said on Monday.
Global output of basic goods from cement to wheat caused
damage totalling $7.3 trillion a year if pollution, water,
greenhouse gases and waste were priced to reflect long-term
impacts, it said in a guide for businesses and investors.
The study, by a business coalition for The Economics of
Ecosystems and Bodiversity (TEEB), said there were wide
uncertainties in the prices. The coalition's backers include the
United Nations, World Bank, businesses and conservation groups.
"The numbers in this report underline the urgency but also
the opportunities for all economies in transitioning to a green
economy," Achim Steiner, head of the U.N. Environment Programme,
said in a statement.
Coal-fired power generation in Asia, led by China, had
estimated revenues of $443 billion a year but caused $452
billion in damage to nature, largely because greenhouse gases
caused climate change and pollution harmed people's health.
Cattle ranching in South America, especially in cleared
parts of the Amazon forest, ranked second with damage estimated
at $353 billion, largely because of stress on water supplies and
deforestation that far exceeded revenues of $16.6 billion.
Coal-fired power in North America was third in the ranking
on damage to "natural capital", ahead of wheat and rice farming
in Southern Asia, it said.
"We are trying to focus the minds of busineses and investors
onto natural capital" to encourage better practices, Dorothy
Maxwell, director of the TEEB for Business Coalition, told
Reuters. "We are not asking anyone to close down."
TOO HIGH PRICES?
Some experts questioned the assumptions in the report, for
instance that a tonne of carbon dioxide emissions costs $106,
based on data in a 2006 study of the costs climate change by
former World Bank chief economist Nicholas Stern.
"That's far too high," said Bjorn Lomborg, a Danish
statistician and author of "The Skeptical Environmentalist". In
a European Union market, carbon emissions allowances trade for
about 4.6 euros ($6.02) a tonne.
"There are uncertainties," said Alastair MacGregor, Chief
Operating Officer of British-based Trucost which did the study
for TEEB. "But the scale of these impacts are so large that they
would dwarf any uncertaintintes."
Even if the damage caused by cattle ranching in South
America was a big over-estimate, the ranking still showed that
cattle ranching in Australia and New Zealand or South East Asia
was a better bet for investors, he told Reuters.
Maxwell said there was a widening corporate focus on nature.
Companies such as Unilever, Nestle or
Pepsico, for instance, were paying more attention to
agricultural supply chains.
German sportswear group Puma was the first major
firm to do an environmental profit and loss account, estimating
it caused 145 million euros ($190 million) in damage to nature
in 2010. The cost is not added to the sales price of products
and is meant as a guide to consumers.