A new report from the World Wide Fund for Nature reveals Australia is number five on a list of the countries whose economies would be worst affected by the loss of nature over the next 30 years.
The study, Global Futures, calculated the economic cost of nature’s decline across 140 countries if the world doesn’t act urgently to address the global environmental crisis.
Australia would have US $20 billion wiped off its economy every year by 2050 if the world carries on with “business as usual”.
The worst-affected countries in terms of actual loss of annual national GDP (US billions) under a business as usual scenario by 2050 are:
1) United States of America (-$83)
2) Japan (-$80)
3) United Kingdom (-$21)
4) India (-$20)
5) Australia (-$20)
6) Brazil (-$14)
7) South Korea (-$10)
8) Norway (-$9)
9) Spain (-$9)
10) France (-$8)
“This is a list nobody wants to be on. We’re number 5 in the world for predicted economic losses as nature declines,” said WWF-Australia economist Joshua Bishop who drilled down into the report’s data on Australia.
Australia’s yearly loss by 2050 is equivalent to a permanent decline of 1.43% in the nation’s annual income. Across all countries, the reduction is 0.67%, therefore Australia is projected to lose at more than twice the global average.
The figures could be much worse. Although Australia is currently experiencing a bushfire crisis, the US $20 billion-per-year hit to the nation’s economy was calculated without considering future bushfire destruction.
In fact, it’s the loss of coastal protection provided by nature which accounts for 98% (US $19.5 billion) of the projected decline in Australia’s GDP.
Coral reefs, mangroves, seagrasses and saltmarshes help slow down water movement and protect against storm surge, but these natural assets are predicted to deteriorate.
“Because so much of Australia’s population, infrastructure and service sector output is concentrated in coastal areas, we are more vulnerable than most to sea level rise and storm surges,” Mr Bishop said.
For example, for all countries taken together, the decline in coastal protection accounts for about two-thirds (68.3%) of all losses in the business-as-usual scenario.
That means Australia is about 1.5 times more vulnerable to the loss of coastal protection services than the world as a whole.
But the picture is more positive in a world in which land-use is carefully managed to avoid further loss of areas important for biodiversity and ecosystem services.
The study terms this the ‘Global Conservation’ scenario and it delivers dramatically better economic outcomes, with global GDP rising by $490 billion per year above the business as usual calculation.
The hit to Australia’s economy would halve, with our GDP dropping by US $9.6 billion per year by 2050 instead of US $20 billion.
“This report spells out the opportunity we have to save billions by protecting our coastal areas, forests and woodlands and becoming a world leader in renewable energy,” Mr Bishop said.
“This ground-breaking study shows how conserving nature is not only a moral issue but a social and economic one. Not only will losing nature have a huge impact on human life and livelihoods, it will be catastrophic for our future prosperity. People across the world are already feeling the impact of rising food prices, droughts, commodity shortages, extreme flooding and coastal erosion. Yet for the next generation things will be many times worse, with trillions wiped off world economies by 2050, ” said Marco Lambertini, Director General of WWF International.
“What’s even more alarming is that these are conservative estimates as, at present, only some of the many benefits nature provides us can be modelled. Nor is it possible to take into account the risk-multiplying effects of environmental tipping points, beyond which ecosystems 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 Global Futures study used new economic and environmental modelling to assess what the macroeconomic impact would be if the world pursued “business as usual”, including widespread and untargeted land-use change, continued increase in emissions of greenhouse gases, and further loss of natural habitats. It found this approach would cost the world at least $479 billion a year, adding up to $9.87 trillion by 2050.
This pioneering method of analysis was created through a partnership between WWF, the Global Trade Analysis Project at Purdue University, and the Natural Capital Project, co-founded by the University of Minnesota.
Steve Polasky, Co-Founder of the Natural Capital Project, 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.”
The Global Futures study predicts annual global losses by 2050 of:
- $327 billion from damaged protections from flooding, storm surges and erosion due to changes in vegetation along coastlines and sea-level rises
- $128 billion from loss of carbon storage which protects against climate change
- $15 billion from lost habitats for bees and other pollinating insects
- $19 billion from reduced water availability for agriculture
- $7.5 billion from lost forests and forest ecosystem services
Thomas Hertel, Executive Director of the Global Trade and Analysis Project, said: “The science and economics are clear. 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.”
The study also foresees global price hikes over the next 30 years for key commodities, as the world’s agricultural sector will be hardest hit by declines in nature, such as water shortages and a decrease in bees and other pollinating insects. This could ultimately lead to a rise in food prices for consumers globally, with implications for food security in many regions.
Predicted price rises by 2050 for key commodities include:
- Timber +8%
- Cotton +6%
- Oil seeds +4%
- Fruit and vegetables +3%
Mr Lambertini said: “We depend on nature much more than nature depends on us. It is hard to imagine a stable, just and prosperous society if forests disappear, pollinators vanish, biodiversity collapses and rivers and the ocean are depleted. The good news is that these disastrous outcomes can be averted if – instead of business as usual - governments act urgently to halt nature loss and tackle our planetary emergency. We need nothing short of a New Deal for Nature and People, as comprehensive, ambitious and science based as the global climate deal agreed in Paris in 2015.”