A new report from the World Bank suggests that investments in ecosystem services must be made in a way that exploits synergies with climate change mitigation and adaptation, as this strengthens the case for action. This report presents a global integrated ecosystem-economy modelling exercise to assess economic policy responses to the global biodiversity crisis.
The report, titled The Economic Case for Nature, estimates that the collapse of select ecosystem services provided by nature – such as wild pollination, provision of food from marine fisheries and timber from native forests – could result in a decline in global GDP of $2.7 trillion annually by 2030.
Modeling the interaction between nature’s services and the global economy to 2030, the report points to a range and combination of policy scenarios available to reduce the impact of nature’s loss on economies.
The World Bank asserts that nature smart-policies will be crucial to implement the post-2020 global biodiversity framework. And, the report stresses the need for the global community to put in place measures to incentivize cooperation and to support an inclusive transition for those stakeholders who are affected by the economic reforms and face opportunity costs.
The fifteenth meeting of the Conference of the Parties to the CBD (COP15) is recognized as a "once-in-a-generation opportunity" to adopt actionable targets, such as the protection of 30% of land and 30% of oceans by 2030 (known as the “30x30” target). The report argues that the ecosystem service benefits accruing from achieving the 30x30 target would almost completely offset the opportunity costs generated by protecting additional land to meet the target.
The model and insights developed for this report can be used to maximize synergies and manage the trade-offs between biodiversity and the climate change commitments. The work presented provides relevant insight for nine of the 20 targets in the draft of the post-2020 global biodiversity framework including:
- Target 2: Protect and conserve 30% of the planet
- Target 7: Climate Change mitigation from national biodiversity strategies
- Target 8: Nutrition, food security, livelihoods from nature
- Target 9: Productivity, sustainability and resilience in agriculture
- Target 13: Biodiversity values into policies and accounts
- Target 14: Green production practices and supply chains
- Target 17: Repurpose subsidies and positive incentives
- Target 18: Financing from all sources
- Target 19: Quality information for decision-makers
🚨 #BREAKING: Protecting #nature could avert global economy losses of $2.7 trillion per year.— UN Biodiversity (@UNBiodiversity) July 1, 2021
Learn more in a new @WorldBank report on the Economic Case #ForNature.
➡️ https://t.co/a4herNvqSe#InvestinNature #COP15 pic.twitter.com/vMJor02MOP
Key Excerpts From the Report
The draft post-2020 global biodiversity framework, which is expected to be adopted in Kunming, China, at the COP-15 of the CBD, calls for urgent, transformative action on nature loss.
The framework recognizes that urgent policy action globally, regionally, and nationally is required to transform economic, social, and financial models so that the trends that have exacerbated biodiversity loss stabilize by 2030 and allow for the recovery of natural ecosystems in the following 20 years, with net improvements by 2050, to achieve the CBD’s vision of “living in harmony with nature by 2050” .
The draft of the post-2020 global biodiversity framework stresses that a whole-of-government and whole-of-society approach is necessary to implement the systematic changes that are needed over the next 10 years. Countries need to internalize the value of nature in decisions at all levels and recognize the cost of inaction. The transformative actions that are required include putting in place tools and solutions for implementation and mainstreaming, reducing threats to biodiversity, and ensuring that biodiversity is used sustainably to meet people’s needs. Enabling conditions and adequate means of implementation, including financial resources, capacity, and technology, are needed to support these actions.
As expected, the 30x30 scenario improves biodiversity outcomes relative to "business-as-usual" (BAU) and all the other policies considered. Globally, the increase in [this report's] biodiversity index is 29 percent, compared with BAU. This represents a reversal of biodiversity lost in the BAU scenario (relative to the “baseline” scenario) and a 50 percent improvement beyond that. Moreover, the change in biodiversity outcomes in the 30x30 scenario show very large improvements over the policies calculated without implementation of this goal. For example, 30x30 achieves a global biodiversity improvement over BAU that is almost six times higher than the next most ambitious scenario (subsidies repurposed to R&D with global forest carbon payment). Biodiversity outcomes improve across all regions and income groups.
The 30x30 goal is within reach at a moderate economic cost. When combined with the most conservation-effective of the policy scenarios presented in section # 5 [of this report], achievement of the 30x30 goal results in a 0.1 percent decline in global GDP in 2030, compared with BAU.
Ambition in Kunming means ensuring that political economy issues are tackled with determination (Section 7.1). Most policies, in most countries, may face important adoption challenges. Yet, despite net GDP gains for the economy as a whole, in particular for developing countries and less wealthy people, in most countries the policies are likely to result in losses for one or more factors of production (land, capital, and labor). Landowners stand to lose from the adoption of most of the policies, potentially representing strong resistance to reform. Boosting R&D investment and technology adoption can help reduce the gap while increasing the size of the pie to be shared among different parts of society. This is an important lesson to be taken up by negotiators of the post-2020 global biodiversity framework and during implementation of the framework over the next 10 years.
Economics is inherently the science that studies the administration of scarce resources to achieve societal goals. Biodiversity and the services nature provides are becoming ever scarcer and so is the capacity of nature to regenerate. There are three important actions for the economics profession to undertake moving forward.
The first is to contribute to the development and implementation of natural capital and ecosystem valuation. Building on the advances that the System of Environmental and Economic Accounts has made and the United Nations Statistical Division has championed, it is important to develop practical and actionable guidance for integrating ecosystem services into national accounting and estimating the economic value of a wide range of ecosystem services. This should include nature-based solutions such as carbon sequestration, flood and erosion protection, and food security (for example, fisheries and agroforestry).
The second is to contribute to assessing policy and investment options. Economic information would provide the basis for development of the economic analyses that are needed to compare investment options such as roads, seawalls, and policy reforms, including land and marine use planning policies at the country level. The availability of such data would also greatly benefit the private sector, helping to inform the decisions of firms and financial institutions at the project and portfolio levels and helping them to engage with sovereigns in an effort to manage natural resources more sustainably.
The third action is to support the integration of an economic and finance lens into National Biodiversity Strategies and Action Plans to ensure that they become a tool for national planning to be adopted and harnessed by economic decision makers. A key opportunity for follow-up work would thus be to apply this analysis to country-specific contexts.