Natural capital – ecosystems, biodiversity, and natural resources – underpins economies, societies, and individual well-being. And, according to a new study hosted by the UN Environment Program (UNEP), protecting ecosystems saves money. For example, the Economics of Ecosystems and Biodiversity study puts a $2 to 5 trillion price tag on the ongoing cost of forest loss and estimates that potential rates of return can reach 40% for mangrove and woodlands/shrublands, 50% for tropical forests, and 79% for grasslands.
The study highlights that losses in the natural world have direct economic repercussions that we systematically underestimate. Developing our capacity to measure and monitor biodiversity, ecosystems, and the provision of services is an essential step towards better management of our natural capital. Providing evidence of the value of our natural capital to decision-makers paves the way for more targeted and cost-effective solutions. Developing and strengthening policy frameworks to manage the transition to a resource-efficient economy is the way forward. Investing in natural capital can be a cost-effective response to the climate change crisis, support local economies, and create jobs.
Study leader, Pavan Sukhdev, a Deutsche Bank economist, said "We have now evaluated 1,100 studies ranging across different countries and different ecosystem services. And we find that with protected areas, for example, no matter how you slice the figures up you come up with a ratio of benefits to costs that’s between 25-to-one and 100-to-one."
Sukhdev added, "Now we can say quite confidently that there is a solid benefit from investing in protected areas…Establishing reserves, policing them and so on, would cost about $40-50 billion per year – and the annual benefit would be about $4-5 trillion."