Citing possible changes in year 2030’s real GDP under the partial ecosystem collapse scenario, compared with the no-tipping-point scenario, the IBRD-WB report indicates that Sub-Saharan countries will experience visible decline by -9.7 percent annually by 2030, while South Asia will experience a decline by -6.5 percent annually and East Asia by -3.4 percent respectively.
By Salam Rajesh
The global decline of biodiversity and ecosystem services is a development issue, and economies, particularly in low-income countries, cannot afford the risk of collapse in the services provided by nature.
This statement comes strong against a general evaluation of declining ecosystems and biodiversity across the globe, consequently impacting businesses and economies, according to a 2021 assessment report of the International Bank for Reconstruction and Development-The World Bank (IBRD-WB), titled as “The Economic Case for Nature: A global Earth-economy model to assess development policy pathways”.
The IBRD-WB report assessed that at a conservative estimate the collapse in select biodiversity and ecosystem services such as wild pollination, provision of food from marine fisheries and timber from native forests amongst others, could result in a significant decline in the global Gross Domestic Product (GDP) by around 2.7 trillion US dollar by the year 2030.
This analysis comes hard on the heels of the push for intensive ecosystem restoration across the globe by at least 30 percent within the target year 2030 on a global scale under the broad canvas of the UN Decade on Ecosystem Restoration (2021-2030). The campaign seeks to achieve multiple ecosystem benefits including biodiversity and species recovery and rejuvenation, livelihoods, and climate actions.
A combination of ‘carefully crafted and coordinated nature-smart policies’, particularly those supporting innovation, can reduce the risk of ecosystem collapse and simultaneously benefit biodiversity and development in a ‘win-win’ situation in terms of biodiversity and economic outcomes, suggests the IBRD-WB report.
Broadly suggesting that the benefits of nature-smart policies can increase substantially when the carbon sequestration services of nature are factored in such policies, the report stressed that the nature and climate change agendas are complementary to one another and there are synergies to be exploited to foster green, resilient, and inclusive development to achieve nature restoration for biodiversity recovery.
It is being estimated that species loss due to changing climatic conditions across the seven continents, particularly influenced by global warming, is further endangering ecosystems due to disruptions in the natural cycle of life, as much as the sharp decline in the population of pollinators like honey bees and fruit bats are viewed as critical in maintaining equilibrium in nature.
The report categorically re-emphasizes that, ‘Economies are embedded in nature and depend profoundly on the flow of goods and services it generates, such as food and raw materials, pollination, water filtration, and climate regulation’.
As in the case of regions where frequent disturbances by extreme weather events ravage the lands and their resources, it may lead to a resource crunch from a decline in the distribution of the biological diversity, more importantly, the diverse food crops and the absence of pollinators leading to failures in pollinating the food crops, in particular native species of food value.
While stressing that environmental degradation can push an ecosystem to a “tipping point” beyond which it will shift to a new state or collapse entirely, the IBRD-WB report points out that the world cannot afford the collapse of ecosystem services, as such a collapse would cost 2.3 percent of the global GDP (about $2.7 trillion) annually by 2030 and some of the poorer countries would be hit hardest.
Low and lower-middle-income countries stand to lose the most in relative terms if ecosystem services collapse, the report warned, and this would put these countries at risk in their prospects to grow out of poverty. Sub-Saharan Africa and South Asia would be hit particularly hard by a collapse in ecosystem services, it added, forewarning long-term impacts on the societies and their economies.
South Asian countries are already being hit significantly by increasingly frequent instances of extreme weather events seen during these past few years. Severe droughts and floods are nemesis for the rural poor particularly while all sections of the people are generally affected by these climatic events, in addition to damaging flash floods induced by cyclonic storms, landslides and mudslides, glacial lake outbursts, and recently, extreme heat waves.
Citing possible changes in year 2030’s real GDP under the partial ecosystem collapse scenario, compared with the no-tipping-point scenario, the report indicates that Sub-Saharan countries will experience visible decline by -9.7 percent annually by 2030, while South Asia will experience a decline by -6.5 percent annually and East Asia by -3.4 percent respectively.
Outlining nature-smart policies to achieve biodiversity recovery and ecosystem services, the IBRD-WB report specifies three policy types of which the first is to ‘repurpose public sector support to economic activities such as agriculture, so that such support is not linked to current or future production volume or value, thus removing incentives to maintain marginal land in production’.
The second policy type is to ‘create incentives for conservation, for example by paying landowners in exchange for the protection of forest carbon sinks, and this can be done through domestic or global forest carbon payment schemes’.
The third policy type, which in the analysis is used in combination with the other two, is to increase public investment in agricultural research and development (R&D) as an incentive to increase output on existing agricultural areas, rather than expanding cultivated areas. The report looks at each of these modalities in separate policy scenarios.
It also reflects upon the concern that climate change implications could severely impact the agricultural sector and influence less productivity, which again would impact the economies of the rural poor in particular. Governments, including India, are already looking at options for climate-resilient crops in anticipation of extreme weather events impacting the sector severely in the coming years as the fallout of global temperature rises and other consequences.
Analyzing further the implications for economic growth in the present global scenario, the report stressed that reaching ecological tipping points could jeopardize some of the poorest countries’ prospects for growing out of poverty, of which seven countries particularly, namely, Madagascar, Bangladesh, Pakistan, Ethiopia, Indonesia, Angola and the Democratic Republic of Congo could see their GDP growth drop by more than 45 percent.
The greatest losses in real GDP growth are observed in Madagascar (-103 percent), Bangladesh (-73 percent), Pakistan (-55 percent), Ethiopia (-53 percent), Indonesia (-47 percent), Angola and the Democratic Republic of Congo (-47 percent), South Africa (-30 percent) and Vietnam (-29 percent) respectively according to the IBRD-WB report’s analysis. These results highlight the relevance of the risks associated with nature loss for development efforts, the report observed.
Finally, the report is of the firm view that “if all countries cooperate and simultaneously adopt nature-smart policies, the world as a whole stands to gain. This means that with appropriate compensatory payments, all countries stand to gain. Accounting for climate change mitigation services considerably increases the number of countries benefiting under all the policy scenarios”.