How should economists think about biodiversity? | The Economist

How should economists think about biodiversity?

A new report for the British government lays out a framework

WHAT IS THE contribution of nature to the economy? Students of economics are well acquainted with production functions, which work out how inputs like capital and labour combine to yield output. These functions make all sorts of assumptions, many of which economists know well (that the contributions of capital and labour are subject to diminishing returns, say).

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