Towards a holistic ecology – Geospatial world
The clock is ticking on the future of this planet. The old economic model of rapid growth is now recognized as the fundamental cause of the depletion of our natural resources. More importantly, the world recognizes the need for a new roadmap for people, economy and nature in interdependence. Today, sustainability is the new frontier, delivering up to $10 trillion in growth opportunities, with $3.6 trillion in opportunities in sustainable food, land and ocean use systems .
Countries like China and the United States have set ambitious programs to increase government investment. They are spending to support a full transition to renewable energy while creating jobs for their economies and bolstering their GDP. Despite these measures, we simultaneously face fears of global inaction on climate and biodiversity. Dubbed the best last change to chart a course towards 1.5 degrees Celsius, COP26 proved a dismal failure with weak commitments from developed countries and watering down the need for global decarbonisation.
Nature and the global economy
The need to integrate the natural world into business and economic decisions has never been more evident. Since 2020, climate and biodiversity-related risks have topped the World Economic Forum’s annual risk report analyzing business perceptions of economic risk. Climate change has cost the world more than $150 billion a year since 2017. Biodiversity loss is expected to disrupt agribusiness value chains. Climate-vulnerable regions like South Asia already experience millions of internal displacements each year due to unusual cyclone activity, extreme rainfall and flooding.
In 1997, Robert Costanza and a team of ecological economists published the world’s first assessment of the economic value of ecosystem services. According to their assessment, this value was greater than the world’s GDP at the time: a grand total of $33 trillion per year. Since then, the idea that much of our global economic value depends on natural capital has gone from a fringe idea to a globally accepted one. In 2020, the Dutch National Bank published a report on the assessment of risks and exposure to biodiversity in investment portfolios. The Dasgupta report on the economics of biodiversity, published by the UK Treasury last year, explains how to integrate nature into economics and political decision-making.
Valuing natural capital
A recent World Bank report estimates that failure to protect pollinators, fisheries and natural forests will cost the global economy $2.7 trillion per year by 2030. A better assessment of our natural capital is essential, but its integration into the national accounts is even more important, because a repository of permanent assets generating and gaining value for the economy, even when they are not mobilized in raw materials. This includes ecosystem services that remain invisible or undervalued in the economy such as water replenishment, soil nutrient cycling, pollination or carbon sequestration.
The initiation of the valuation of natural capital will make it possible to better create national ecological budgets. Integrating environmental factors into the budget structure of an economy, particularly the annual national budget, allows the government to track expenditure on natural capital and invest for its regeneration. It offers policy makers the tools to incentivize new businesses by restructuring the incentives, businesses and infrastructure that generate economic and ecological benefits.
Today, an estimated 3.4 billion people live in its rural areas, many of them in developing countries and most on the front lines of threats posed by climate change and biodiversity loss. The IPCC’s 6th Assessment Report underscores just how dire the situation will be: crop failures are set to increase, tropical fisheries are set to decline by 40%, and pastoral communities will increasingly lose their livestock to extreme heat and an unusual drought. Extreme weather conditions, erratic rainfall and unusual heat have all contributed to declining crop yields for smallholder farmers. Unsustainable industrial agricultural practices are linked to the increasing desertification of fertile soils and the loss of crop and pollinator biodiversity. A 2019 assessment of biodiversity loss in food production by the FAO called this phenomenon one of the greatest risks to global food security.
Despite this emerging crisis, adaptation finance for developing countries has only accounted for 25% of total adaptation and mitigation spending pledged under the Paris Agreement. The global conversation on climate change has largely centered on urban communities and the pathways to decarbonization that largely benefit urban communities: electric transportation, renewable energy systems, and reducing emissions among industries. Investments in rural communities have been largely overlooked. The biodiversity crisis has barely garnered the same kind of attention and financial mobilization as climate change.
Investing in rural circular economies
Action on climate change and biodiversity loss is essential to build rural resilience for decades to come. Livelihood programs must move beyond the traditional focus on agriculture and livestock to a circular economy approach that includes nature-regenerating options such as agroforestry, sustainable forestry, sequestration of carbon and payment for ecosystem service programs. Restoration and reseeding of ecosystems must take center stage, through programs that also provide income to the community, such as payment for restoration initiatives.
Investing in the regeneration of agricultural and natural ecosystems can go a long way in alleviating the global crisis in rural jobs and livelihoods. An estimate for the eight states that make up India’s Eastern Himalayas would generate revenues of up to $64 billion per year over a 30-year period from agroforestry products and sustainable bamboo against an investment of $3 billion. Reinvesting these revenues in the community could provide universal basic assets such as health care, education and energy to more than 6 million households – with health and education spending meeting international standards of l OECD. For a predominantly rural and agrarian region, these investments would go a long way to improving human well-being in a multidimensional way: by recognizing the essential role that ecology plays in their lives.
The next ten years are imperative to place ecology at the forefront of global and national action, to address the growing global threats to its food, water and livelihood systems and to its rural communities. Investing in a transition to ecology is the economy is no longer an option: it is a necessity.