A new report suggests that the price tag our current economic model will exact on nature is $9.87 trillion.
The price tag our current economic model will exact on nature is $9.87 trillion. This is how much money we will lose by 2050 if we continue with “business as usual,” according to a new report.
The new Global Futures report by the World Wide Fund for Nature, the Global Trade Analysis Project and the Natural Capital Project covers the economic impacts of environmental change for 140 countries.
The analysis followed a four-step methodology, starting from outlining ecosystem services provision under different land-use scenarios and further analyzing drivers of change and how those changes would affect economic outcomes. Building on widely recognized frameworks and tools such as IPBES, InVEST and GTAP, the report serves as an authoritative statement.
“This ground-breaking study shows how conserving nature is not only a moral issue but a social and economic one,” notes Marco Lambertini, director general of WWF International. “Not only will losing nature have a huge impact on human life and livelihoods, it will be catastrophic for our future prosperity.”
Many of those impacts will be linked to the extensive damage of coastal infrastructure, flooding and erosion of land areas, as well as the loss of mangroves and coral reefs. Some of the specific changes we should expect include a rise in commodity prices and shortages of resources like timber and cotton. Producers in all sectors should get ready for the increased costs of insurance and infrastructure repair.
The United States, the United Kingdom, and Japan will be among the biggest losers in absolute terms. However, many countries with smaller economies like Togo, Vietnam and New Zealand will bear much bigger losses in terms of relative reductions in their GDP. Overall, there will a fall of be at least 0.67% in global GDP every year by 2050.
Despite such grave projections, at least two alternative scenarios are possible. Achieving more balanced development can lead to “only” $2.62 trillion in losses. And if we rethink our choices and adopt a global conservation pathway, we might even achieve net economic gains.
Despite its ambitious premise, the report might not be even close to capturing the real losses from inaction as ecological collapse will exact a heavy toll on economies worldwide. Under negative or more realistic rates between 0% and 1.5% damages would likely add up to a figure that is much higher than the report’s suggested estimate.
The authors concede that “the model considers only a few out of the many ecosystem services provided by nature” and doesn’t take into account broader and more complex ecological dynamics. As a result, it should not be considered an assessment of the total price of nature’s loss.
The modeling also doesn’t address the potential impacts of multiple ecosystems collapsing at once, which is both increasingly likely and dangerous.
In the end, no matter how good our estimates are, no money can replace freshwater sources, lost ecosystems or a livable climate. The report reminds us that “economic evidence such as this should always be considered as just one component of the evidence base for decision-making”.
The key recommendations of the report include making 30% of all land and water protected, making sustainable decision-making a new norm and adopting the New Deal for Nature and People.