Site icon Conservation news

US economy will take biggest hit if we continue with business as usual: report

  • New research finds that if humans carry on with business as usual and the environmental degradation that results, we will pay a steep price — quite literally.
  • Researchers found that if we simply continue under the status quo, the global economy will lose at least $479 billion a year, adding up to nearly $10 trillion in losses by 2050, as compared to the “baseline” scenario in which there is no change in ecosystem services over the next 30 years.
  • Of the 140 countries included in the study, the United States stands to take the biggest economic hit, losing $83 billion per year by 2050 under this “business as usual” scenario that includes intense consumption of energy and raw materials, widespread land-use change, ongoing rises in greenhouse gas emissions, and continued loss of biodiversity.

New research finds that if humans carry on with business as usual and the environmental degradation that results, we will pay a steep price — quite literally.

Researchers with WWF, Purdue University’s Global Trade Analysis Project, and the Natural Capital Project looked at how forests, wetlands, coral reefs, and other “natural assets” that furnish the ecosystem services we all rely on will be impacted by a variety of future development scenarios. They then examined the economic implications of those impacts over the next three decades.

As detailed in a report summarizing their results, the researchers found that if we simply continue under the status quo, the global economy will lose at least $479 billion a year, adding up to nearly $10 trillion in losses by 2050, as compared to the “baseline” scenario in which there is no change in ecosystem services over the next 30 years.

Of the 140 countries included in the study, the United States stands to take the biggest economic hit, losing $83 billion per year by 2050 under this “business as usual” scenario that includes intense consumption of energy and raw materials, widespread land-use change, ongoing rises in greenhouse gas emissions, and continued loss of biodiversity. The economies of Japan and the UK will also see big losses of $80 billion and $21 billion, respectively, every year.

“This groundbreaking report shows that the U.S. will suffer the world’s biggest economic impact due to nature loss,” Rebecca Shaw, chief scientist at WWF, said in a statement. “We cannot envision a just and stable country, and a prosperous economy, if forests disappear, pollinators vanish, biodiversity collapses and rivers and the ocean are depleted. Continuing with business as usual could lead to disastrous outcomes. We need governments and corporations to halt nature loss and tackle this planetary emergency.”

According to the report, if we continue with business as usual, reductions in the supply of just six ecosystem services — crop pollination, protection of coasts from flooding and erosion, provision of clean water, timber production, marine fisheries, and carbon storage — would cause an annual drop in the global GDP of 0.67% by 2050.

Included in the annual global losses by 2050 would be $327 billion from flooding, storm surges, and erosion due to sea-level rise and changes in vegetation along coastlines; $128 billion from the loss of carbon storage; $19 billion from reduced water availability for agriculture; $15 billion from the loss of habitat for bees and other pollinator insects; and $7.5 billion from lost forests and the ecosystem services they provide.

By contrast, under a “Global Conservation” scenario marked by sustainable development and protections for areas important for biodiversity and ecosystem services, the researchers found that global GDP would increase by 0.02% per year, or some $11 billion, by 2050 — an annual net gain of $490 billion every year over the business as usual scenario.

The world’s agricultural sector will be particularly impacted if we don’t choose the Global Conservation scenario, leading to higher prices for commodities: timber prices would go up by 8%, cotton by 6%, oil seeds by 4%, and fruit and vegetables by 3%.

“Poorer countries would bear most of the costs, compounding the risks faced by millions in already vulnerable economies,” the report states. “Eastern and western Africa, central Asia and parts of South America would be hit particularly hard as a result of the changes in price, trade and production levels (with annual GDP losses of up to 4%). Countries like the USA, Japan, Australia and the UK would also see large losses due to loss of coastal infrastructure and agricultural land through flooding and erosion.”

The researchers note in the report that these figures should be considered conservative estimates of the economic impacts from the destruction of nature, since they only looked at the six ecosystem services for which there is enough evidence to quantify the impacts and could not account for the effects of ecosystems reaching tipping points beyond which they change much more rapidly and irreversibly, such as when tropical forests become so degraded that they shift to more fire- and drought-prone savanna habitats.

Additionally, the economic and environmental models used by the researchers to arrive at their estimates only factor in changes to specific natural assets and the ecosystem services they provide, not broader changes that the planet is undergoing, like global climate change and water scarcity.

“The science and economics are clear,” Thomas Hertel, executive director of the Global Trade and Analysis Project, said in a statement. “We can no longer ignore the strong economic case for restoring nature. Inaction will cost us far more than actions aimed at protecting nature’s contributions to the economy. To ensure positive global futures, we need to achieve more sustainable patterns of production and land use, and reform economic and financial systems to incentivize nature-based decision making.”

Fishing at daybreak on the Mekong River in Laos. Developing countries will be badly affected as nature loss impacts production levels, trade, and food prices, according to the report. Photo by Rhett Butler.

FEEDBACK: Use this form to send a message to the author of this post. If you want to post a public comment, you can do that at the bottom of the page.