THE environmental impact of doing business costs the global economy $4.7 trillion a year, according to a report released on April 15.
That figure includes the top 100 environmental impacts—such as air pollution-related health costs, the effects of greenhouse-gas emissions, the loss of nature-based benefits such as carbon storage by forests, and loss of natural resources.
The top six environmental costs are from greenhouse gas emissions, water use, land use, air pollution, land and water pollution, and waste, according to Natural Capital at Risk: The Top 100 Externalities of Business.
The report was released by the TEEB (The Economics of Ecosystems and Biodiversity) program for Business Coalition, consisting of organizations that support accounting for natural capital in business. TEEB is backed by the Group of Eight economic powers and the United Nations Environment Program.
Members of the coalition include the World Business Council for Sustainable Development, the Institute of Chartered Accountants in England and Wales and the World Wildlife Fund. The report was commissioned by TEEB and prepared by Trucost.
Some business sectors with significant environmental impact—such as mining—create an economic loss when accounting for such things as natural-resource use and pollution costs, according to the report, which considered impacts in various regions.
For instance, the environmental and social costs of coal-fired power generation in East Asia and in North America outweigh the production value of the sector, according to the report.
Coal-fired power generation in East Asia costs an estimated $452.8 billion in natural capital impacts, making it the highest-impact regional sector. Revenue for the regional sector is $443.1 billion.
Cattle ranching and farming in South America has the second-highest regional sector impact, with $353.8 billion in natural capital costs, compared to $16.6 billion in revenue.
Coal-fired power generation in North America has the third-highest regional sector impact, with an estimated $316.8 billion in natural capital costs, compared to $246.7 billion in revenue.
The natural capital costs for coal-fired power generation include greenhouse-gas emissions and health costs and other damage from air pollution.
Wheat and rice production in South Asia rank fourth and fifth, respectively.
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