12 February 2020

Press Release

For immediate release

Loss of nature will wipe trillions of pounds off world’s economies - and UK will be among the worst hit

New study calculates costs of losing Earth’s natural life-support systems, as WWF calls for urgent global action to tackle planetary emergency.

Rising food prices, droughts, commodity shortages, extreme flooding and coastal erosion will wipe trillions of pounds off economies around the world if we don’t act urgently on the global environmental crisis, a new WWF study shows.

The Global Futures study estimates the decline of natural assets will cost the world at least £368 billion a year - adding up to almost £8 trillion by 2050 - roughly equivalent to the combined economies of the UK, France, India and Brazil.

The UK will suffer some of the biggest financial losses - third behind only the United States and Japan [1] - taking an annual hit to its economy of at least £16 billion by 2050 - the current combined annual funding for the police, fire service, prisons and law courts. The main economic costs will be caused by the loss of natural coastal protection services leading to flooding and erosion, as well as declining fish stocks harming the fishing industry. [2].

Global Futures uses innovative economic and environmental modelling to calculate and compare the costs of nature’s decline across 140 countries and for key industry sectors [3]. This method of analysis was created through a partnership between WWF, the Global Trade Analysis Project and the Natural Capital Project.

The study revealed annual global costs due to loss of specific ecosystem services by 2050 of:

Coastal protection: -£251 billion
Carbon storage: -£98 billion
Water supply for agriculture -£14 billion
Pollination from wild pollinators: -£12 billion
Forestry production: -£6 billion

These are conservative estimates, as only some impacts can be modelled at present, and the study does not take into account the risk-multiplying effects of environmental tipping points, beyond which habitats change rapidly and irreversibly, leading to sudden catastrophic loss of nature’s services. If all of these issues were factored in, the figures would be even starker.

The study also predicts global price rises for key commodities such as timber, cotton, oil seeds, fruit and vegetables, as the agricultural sector will be hardest hit by loss of nature. Predicted price rises for key commodities by 2050 include:

Timber +8%
Cotton +6%
Oil seeds +4%
Fruit and vegetables +3%

Katie White, Executive Director of Advocacy and Campaigns at WWF, said:

“We are destroying our planet and our economic future. We need urgent, global leadership and immediate action to change the way we use land, to invest in the restoration of nature, to cut emissions and critically to stop destroying forests for food production. This needs to be backed in the UK with bold policies to cut our global footprint and future trade deals that clearly reject deforestation and other poor agricultural practices.”

The report shows that poorer countries will disproportionately bear most of the costs of nature loss, but all countries will be affected:

In Eastern and Western Africa, central Asia and parts of South America nature loss including water shortages and a decline in pollinators will affect production levels, trade and food prices.
Countries with extensive coastlines such as the United States, Australia and Japan will see large losses caused by damage to coastal infrastructure and farm land through increased flooding and erosion, as a result of loss of natural defences including coral reefs and mangroves.

In contrast, if land and sea use is managed carefully to avoid further nature loss, annual global GDP would slightly increase, by £9bn a year.

Professor Thomas Hertel, founder of Global Trade Analysis Project (GTAP) and project team member, Purdue University, said:

“The science and economics are clear. We can no longer ignore the strong economic case for restoring nature. Inaction will result in slower economic growth, disruption of coastal communities and higher food prices. 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.”

Professor Steve Polasky, co-founder of the Natural Capital Project and project team member, University of Minnesota, said:

“The world’s economies, businesses and our own well-being all depend on nature. But from climate change, extreme weather and flooding, to water shortages, soil erosion and species extinctions, evidence shows that our planet is changing faster than at any other time in history. The way we feed, fuel and finance ourselves is destroying the life-support systems on which we depend, risking global economic devastation.”

Mark Gough, CEO, The Capitals Coalition said:

“The findings in this study will have serious implications for business. There are some leading businesses who are already working to identify their impacts and dependencies on nature and people, and they will be in a stronger position to address the challenges this study sets out. As investors also start to better understand these risks, it will increasingly affect businesses’ access to finance, strengthening the need for them to act.”

To drive investment in nature’s recovery at the scale and pace needed, we urgently need to transform our economic and financial systems. Governments, businesses and civil society must work together to identify how best to achieve this, including through initiatives such as the Business for Nature coalition. In the UK, pioneering government initiatives such as the Dasgupta Review on the Economics of Biodiversity and the Global Resource Initiative will also explore the issues and solutions. And WWF is backing a New Deal for Nature and People to reverse the loss of biodiversity by 2030 and put nature on a path to recovery for the benefit of people and planet - as comprehensive, ambitious and science based as the global climate deal agreed in Paris in 2015.

The Global Futures report will be launched at the Royal Society in London on Tuesday 11 February 2020, at an event attended by political leaders, policy makers and business chiefs. The full Global Futures report can be found here.

ENDS

For further information please contact:

Lis Speight | Media Manager at WWF:

T: +44 (0)1483 412241 | E: LSpeight@wwf.org.uk

NOTES TO EDITORS

All currency figures quoted are 2020 GBP (pounds sterling). These were obtained by converting figures in the original research results (2011 USD) to GBP using the exchange rate of 1 USD to 0.76881 GBP (exchange rate on 30th January 2020)

Global Futures looks at the crucial benefits - or ‘ecosystem services’ - that nature provides and analyses future impacts of their decline on the world’s economies trade and industry. These six services include the supply of food, water and raw materials, the pollination of crops, protection from flooding, storm surges and erosion, and carbon storage to protect us from climate change. The study then assesses how changes in these services under various future development scenarios would affect macroeconomic outcomes - including GDP, trade, production and commodity prices - and the potential economic gains if we protect and restore nature.

The study complements WEF’s New Nature Economy Nature Risk Rising report which shows that $44 trillion USD of global economic value generated (over half the world’s total GDP) is moderately or highly dependent on nature and its services. WWF Switzerland’s Nature Is Too Big To Fail report also warned of the growing risks to the financial sector associated with biodiversity loss.

[1] Worst-affected countries in terms of actual loss of annual GDP (GBP billions) by 2050:

1) United States of America: -£63.4

2) Japan: -£61.5

3) United Kingdom: -£16.2

4) India: -£15.6

5) Australia: -£15.2

6) Brazil: -£10.9

7) South Korea: -£7.8

8) Norway: -£6.7

9) Spain: -£6.6

10) France: -£6.5

Worst-affected countries in terms of % loss of annual GDP by 2050:

1) Madagascar (4.2%)

2) Togo (3.37%)

3) Vietnam (2.84%)

4) Mozambique (2.69%)

5) Uruguay (2.54%)

6) Sri Lanka (2.48%)

7) Singapore (2.31%)

8) New Zealand (2.29%)

9) Oman (2.25%)

10) Portugal (1.95%)

[2] UK breakdown: The breakdown of the results for the UK reveals annual losses to national GDP by 2050 due to loss of specific ecosystem services of:

Coastal protection: -£15 billion
Marine fisheries: -£1 billion
Water supply: -£52 million
Pollination: -£45 million
Forestry production: -£27 million

[3] The Global Futures initiative - a partnership with the University of Minnesota and Purdue University – is pioneering a new economic modelling approach to assess the impact of nature’s decline on the world’s economies, trade and industry. The powerful new tool is linking powerful global trade models to high resolution land-use and ecosystem services models for the first time, providing a rich picture of how environmental change will affect the future economic prospects across 140 countries and all economic sectors. The aim is to help support more sustainable policy-making. The full landmark report feeds into a number of critical international policy-making processes, including the Sustainable Development Goals.

• WWF initiated a partnership with the University of Minnesota and Purdue University to strengthen the evidence base for how natural capital and ecosystem services generate economic value, and how policies aimed at conserving or enhancing natural capital contribute to economic activity, income, trade and employment. This partnership combines the expertise of researchers in the Global Trade Analysis Project (GTAP), based at Purdue University, and the Natural Capital Project (NatCap) based at the University of Minnesota.

• GTAP has pioneered global economic production and trade modelling. Since its beginning in 1992, GTAP has grown into a global network of over 18,000 individuals in over 175 countries. GTAP has built a common database and modelling framework to assess the economy-wide impacts of trade, agricultural and environmental policies. More recently, GTAP has become a focal point for research into issues bearing on the world’s land and water resources, including the assessment of climate impacts and mitigation activities, including biofuel production, on food security, incomes and poverty.

• NatCap has pioneered biodiversity and ecosystem service modelling linked to economic valuation. The goal of NatCap is to integrate the value that nature provides to society into all major decisions, with the ultimate objective of improving well-being of people and nature by motivating greater and more targeted investments in natural capital. NatCap has developed the InVEST (Integrated Valuation of Ecosystem Services and Tradeoffs) suite of ecosystem service assessment tools, comprising more than 20 models that estimate how land use and other forms of ecosystem management and change impact the provision of a broad range of ecosystem services. InVEST has been applied in 185 countries to date.