HomeLeading SustainabilityEnvironment, economy, and the Global Futures report

Environment, economy, and the Global Futures report

Last September, a group of researchers submitted a 16-page document to the United Nations General Assembly that detailed a striking conclusion: Continued loss of nature – at current rates – would cost global GDP hundreds of billions of dollars by 2050.

There was a bright side, though: The report also showed that, with targeted conservation strategies, a net positive economic gain could be achieved.

The document, which was created specifically for the UN General Assembly by a team of collaborators from the World Wildlife Fund, the Global Trade Analysis Project, and the Natural Capital Project, was just a preview of a full report published in late February. Its conclusions not the least of which is that, when all ecosystem services are considered, the world could in fact lose $9.87 trillion from its global GDP by 2050  are wake up calls.

The Global Futures report is named after a first-of-its-kind analytical tool created by the report’s authors, who linked an established model of what are known as ecosystem services (benefits for humans from nature such as coastal protection, pollination, and carbon sequestration) with the primary model used to project macroeconomic outcomes (including GDP, employment, and prices). The analysis covers 140 countries and all key industry sectors. This novel, integrated approach demonstrates that nature provides significant value to economies worldwide — and that when it disappears, so do the financial benefits it can help to create.

To determine the range of possible future economic and environmental outcomes, the Global Futures team drew inspiration from the IPBES Shared Socio-Economic Pathways scenarios (SSPs), socioeconomic scenarios used to project worldwide climate impacts given a range of policy and emissions factors. The “fossil-fueled development” SSP scenario served as the baseline for what the team called “business-as-usual,” in which the world continues to lose ecosystem services at current rates.

The results were stark. Under this scenario, annual global GDP decreased by 0.67% (U.S. $9.87 trillion). Losses to ecosystem services such as pollination took a particular toll on the food and agricultural sectors, whose supply chains were significantly altered by losses in global commodity supply. Land clearing for agriculture, mining, livestock, and infrastructure development diminished forests, taking with them the carbon storage capabilities they provided. Everyone felt the blow: Low and middle-income countries bore the greatest cost of nature loss, and large countries such as Australia, the U.K., the U.S., India, and Japan also saw significant losses to annual GDP. 

The conclusion was inarguable. “The way we feed, fuel and finance ourselves is destroying the life-support systems on which we depend, risking global economic devastation,” says IonE Fellow Steve Polasky, co-founder of the Natural Capital Project and a Global Futures team member. With these high stakes in mind, the team turned to its next scenario, using their tool to determine what would occur under the most optimistic of the SSPs, known simply as “sustainability.”

This SSP scenario reflects what would happen if current and recommended climate policies were all implemented: nature is used locally and sustainably, economic markets are oriented toward local environmental and quality of life priorities, and communities engage in participatory, bottom-up decision making processes. The Global Futures analysis demonstrated, however, that even this most optimistic of climate policy scenarios resulted in annual losses of 0.18% of global GDP by 2050. 

The team got creative. A global conservation scenario was born one grounded in the Sustainability SSP, but that also explicitly prevented the expansion of agriculture or development into protected areas, wetlands, or areas that harbor high pollination services, carbon storage capabilities, or biodiversity. 

This one change resulted in markedly different results. In this scenario, global GDP rose by .02% by 2050, and fisheries and processed foods had positive rather than negative changes in global output. In many cases, the world’s poorest countries had the most to gain. The richest fared well too, compared to the alternative: The U.S. GDP declined by $39.7 billion, a sharp contrast to the $82.5 billion decrease projected by the Business-As-Usual scenario.

Like all researchers, lead author Justin Johnson has his eye on the next iteration of the project. Nevertheless, he’s enthusiastic about these results.

“Even this first pass shows that careful conservation planning that considers both economic and ecosystem values can outperform business as usual approaches, both for people and for nature,” Johnson says. He hopes the Global Futures report will serve as an incentive for world leaders to gear systems toward long-term sustainable prosperity for both humans and nature. 

As the team wrote in the full report: “To reverse nature’s decline, and for humanity to enjoy a sustainable and prosperous future, we urgently need transformational change across our economic and financial systems. We hope that this report, alongside other evidence, will encourage and enable world leaders to take decisive action before it is too late.”

 

Grace Becker is IonE’s communications associate and an undergraduate student at the University of Minnesota, where she studies strategic communication, sustainability studies, and Spanish. 

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