It is not uncommon to hear people referring to tipping points, positive feedback, path dependence, irreversibility, and even catastrophic risks when talking or writing about climate change and biodiversity loss. As the expressions point to features of the processes governing the biosphere, it is important to understand what they amount to. Otherwise the terms will remain in wide use even when their significance for economic policy remains unclear.

The source of those features is the non-linearity of the processes that govern the biosphere. Non-linearity is a ubiquitous feature of Earth System processes, so ubiquitous that it would not be an exaggeration to say that the economics of biodiversity is the study of non-linear processes.91 The meaning of non-linearity is simple enough: if, to take an example, you were to replicate an ecosystem M times, the functions of the enlarged ecosystem would not be an M-fold replica of the original ecosystem.

The framework we have constructed so far for building the economics of biodiversity has had but the briefest of looks into risk and uncertainty. Our account could almost be read as though the socio-ecological world is deterministic. But we know it is not of course. Even in everyday conversation it is customary to take as understood that when someone says, for example, that the next train to London is scheduled to arrive at the station in 50 minutes time, uncertainty is acknowledged, that the speaker says the train is expected to arrive in 50 minutes time.

The term ‘expectation’ has something like ‘average’ built into it.

Directly investing in our stock of natural assets can help to reduce the Impact Inequality. Conservation of functioning ecosystems and restoration of degraded ecosystems are two important approaches to maintain, improve and increase our stock of natural assets and their associated biodiversity. This chapter and Chapter 19 focus on approaches to conservation and restoration of our stock of ecosystems, the living organisms that live in them and the genes they contain.

Conservation seeks to prevent the degradation of ecosystems and the associated species and genes within them, whereas restoration seeks to recover ecosystems from degraded states (Figure 18.1). Ecosystems are dynamic systems that are not fixed in time and space; they interact in multiple ways. Chapter 2 highlighted evidence of how biodiversity enables ecosystems to be resilient, adapt and evolve, and how it supports their productivity in providing ecosystem goods and services. Chapter 2 also described how ecosystems are the key components of the biosphere in the economics of biodiversity and showed that biodiversity is an enabling characteristic.

Chapters 4 and 4* discussed how the embeddedness of the global economy in the biosphere means that degradation or depletion of natural assets results in losses and disruption to economic activity. This has macroeconomic and financial implications for businesses and financial institutions, via, for example, reduced commodity yields, disrupted supply chains, output losses due to natural disasters such as droughts, and the loss of potential new sources of products and services, such as medicines and other pharmaceutical products (McCraine et al. 2019; OECD, 2019a; Rudgley and Seega, 2020). In addition, the existence of ecosystem tipping points and regime shifts mean that changes to the productivity of ecosystems, and the quantity and quality of the services they provide, can be both abrupt and long-lasting (Chapter 3). Both are aspects which would have significant implications for a range of economic activities and livelihoods (Johnson et al. (forthcoming); World Economic Forum, 2020a) (Chapters 5 and 14).

As formalised in the global model in Chapter 4*, harvesting of provisioning goods has consequences for our global stock of natural capital, and its ability to provide regulating and maintenance services on which economies and societies also depend. Building on Chapters 2 and 4, this chapter examines our current extraction of provisioning goods and expectations for our future demand, and the consequences for regulating and maintenance services.

In the absence of collective action, the use of the biosphere’s goods and services gives rise to an important class of reciprocal externalities. The externalities are most powerful when access to a resource base, which may be an entire ecosystem, is unrestricted. Today, the most prominent among open access resources are the atmosphere as a sink for gaseous and particle emissions, and the oceans beyond the 200-mile exclusive economic zones (EEZs) of nations.249 Anthropologists have discovered, however, that ecosystems with small geographical reach, such as village woodlands and ponds, are usually neither private property nor state property, but are instead communal property. In this chapter, we use the conceptual apparatus that was developed in Chapter 6 to provide a sense of the way communities in various parts of the world have tried to manage their local ecosystems. By so doing, we will gain an understanding of the successes and failures of societies to live within their local resource base.