Global GDP risks $2.7trn decline Over Ecosystem Collapse
The World Bank estimates that the collapse of select ecosystem services provided by nature can result in a decline in global Gross Domestic Product (GDP) of 2.7 trillion dollars annually by 2030.
The bank, in a statement in Washington on Friday, said this was according to a newly published report, adding that Sub-Saharan Africa and South Asia would suffer the most relative contraction of real GDP.
The report is titled: The Economic Case for Nature: A Global Earth-Economy Model to Assess Development Policy Pathways.
Recall that the report was undertaken in collaboration with the University of Minnesota and Purdue University.
It comes as countries are set to formulate a new global biodiversity framework at a Conference of the Parties (COP15) of the Convention on Biological Diversity in Kunming, China.
The report named wild pollination, provision of food from marine fisheries and timber from native forests as some of the select ecosystem services whose collapse could decline global GDP.
It also underscores the strong reliance of economies on nature, particularly in low-income countries.
According to it, Sub-Saharan Africa at 9.7 per cent annually and South Asia at 6.5 per cent would suffer the most relative contraction of real GDP due to a collapse of ecosystem services by 2030.
“This is due to a reliance on pollinated crops and in the case of Sub-Saharan Africa on forest products, as well as a limited ability to switch to other production and consumption options that would be less affected.”
It, however, said that nature smart-policies would be crucial to implement the post-2020 global biodiversity framework, adding that the Kunming COP was also seen as an opportunity to adopt actionable targets. These targets are the protection of 30 per cent of land and 30 per cent of oceans by 2030 (known as the “30×30” target).
The report argues that the ecosystem service benefits accruing from achieving the 30×30 target would almost completely offset the opportunity costs generated by protecting additional land to meet the target.
It said 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.
“For example, when forest carbon payment schemes are implemented, either at the domestic or global level, other domestic policies like agriculture subsidy reform become more effective at protecting nature while enhancing economic gains.”
World Bank Group President, David Malpass, said that preserving nature and maintaining its services were critical for economic growth.
“Nature-smart policies and reforms, including agricultural subsidy reform and investments in agricultural innovation enhance biodiversity and economic outcomes.
“As countries seek to recover from the COVID-19 pandemic, it is important that economic development improves outcomes for nature.”
Giovanni Ruta, World Bank Lead Environmental Economist and one of the report’s authors said a combination of policies shows the greatest win-wins for both biodiversity and for economies.
She said adding investment in research and development to the policy mix was particularly important and beneficial to developing countries.
The bank, however, said it was committed to supporting operations focused on biodiversity and that invest directly in the conservation of species and natural habitats and improve livelihoods.
This could be through sectors that rely on natural capital, such as forestry, fisheries and agriculture.
It added that over the past year, its portfolio included 70 biodiversity projects in more than 40 countries with an estimated net commitment of 1.18 billion dollars.
Examples of this work include the Amazon Sustainable Landscapes Program, which is supported by the Global Environment Facility and investments in sustainable agriculture and landscape management in Brazil and Ethiopia. More at: https://www.vanguardngr.com/2021/07/ecosystem-collapse-global-gdp-risks-2-7trn-decline-annually-w-b-report/