June 5, 2008 - Environmental damage and species loss costs between $2.1 and $4.8 trillion dollars a year, according to a new U.N. report on biodiversity.

The report – the most comprehensive assessment yet of the economic impact of ecological damage – assigns a monetary value to environmental assets that are not usually considered in cash terms. For example, the report calculates the dollar value of clean water, healthy soil, protection from floods and soil erosion, natural medicines, and natural sinks that store greenhouse gases such as carbon dioxide and methane.

"Though our well-being is totally dependent on these 'ecosystem services,' they are predominantly public goods with no markets and no prices," the report notes.

Principal author Pavan Sukhdev, who heads Deutsche Bank's global markets business in India, describes this lack as "trying to navigate uncharted and turbulent waters with an old and defective economic compass." The true value of biodiversity and ecosystem services must be incorporated into policy decisions, he says.

The report was inspired by the Stern Report, the landmark 2006 assessment of the economic cost of global warming.