Forest Loss Is Costlier Than Bank Crisis, EU Report Says

Forest loss is costing the world economy between $2 trillion and $5 trillion a year, more than the current banking crisis, a report from the European Union concluded. Deutsche Bank economist Pavan Sukhdev, who headed the study, pegged Wall Street losses at $1 trillion to $1.5 trillion so far. The cost of forest disappearance— mainly the destruction of their ability to absorb planet-heating carbon dioxide and to filter drinking water — is “not only greater but it’s also continuous,” Sukhdev said. “It’s been happening every year, year after year.” The loss weighs most heavily on poor countries, the report noted, because they rely more directly on forests for their livelihood. In its second phase, the study — The Economics of Ecosystems and Biodiversity — will expand to examine other natural systems. Sukhdev hopes to finish it by mid-2010.