According to UN Environment Programme (UNEP) data, nearly 1 in every 4 species assessed is threatened, with demand for resources expected to rise 60% by 2060 from 2020 levels.
Often, economic prosperity and nature conservation are perceived as a zero-sum game. But it can be a more nuanced relationship. Services provided by ecosystems are widespread, of both the tangible and intangible kind. This link between economic output and biodiversity is supported by a large set of evidence.
WEF establishes that nearly half of global GDP amounting to $44 tn is significantly dependent on ecosystem services. Unctad identifies nearly 17% of global exports as bio-originated products directly linked to biodiversity and ecological health. Human activities related to food production, infrastructure, energy generation and mining are sectors responsible for about 79% of the impact on threatened species. Since all economic outputs, in varying degrees, are dependent on nature, economic and financial consequences of ecosystem degradation, including supply chain disruptions, risks to physical capital and increased cost of business, are particularly concerning.
Even decline of a single species can result in significant environmental, social, cultural and economic setbacks for a country. For instance, the rapid fall in the vulture population in India caused damages to human health and ecosystem quantified at about $69.4 bn a year, according to an October 2024 University of Chicago study.
Impacts of biodiversity loss and species extinction become more profound when their unequal outcomes are assessed. Developing countries risk increased poverty and food insecurity due to loss of livelihood and robust food sources. Biodiversity degradation can lead to losses equivalent to 2.3% of global GDP annually by 2030, with the highest negative impact on real GDP of sub-Saharan Africa and South Asia. The situation becomes more precarious as low-income countries risk loss of 10% of their respective GDP, and are more vulnerable to economic shocks prompted by loss in biodiversity.International Union for Conservation of Nature (IUCN) highlights the vulnerability of nearly 1.6 bn people to impacts of biodiversity loss, mostly located in the developing world, where markets are more reliant on natural capital than developed countries, and absence of robust policy tools and economic resources significantly limits their capacity to act.The close relationship of biodiversity with climate change adds to the logic of assigning it policy priority at national and international levels. Incentives have been crafted, including Global Biodiversity Framework in 2022. Challenges, however, persist in delivering to the goals of these instruments.
The international community has not only lapsed in its commitment to prevent biodiversity losses but has also exceeded the long-term targets related to land use by an alarming 6x, according to Global Resources Outlook. UN Global Land Outlook warns that inaction on biodiversity loss may cause the extinction of nearly 1 mn species of flora and fauna in the near future.
The recent Convention on Biological Diversity (COP16) at Cali, Colombia, emerged as the largest biodiversity COP to date, and concluded with establishment of a permanent body to ensure participation of local communities in biodiversity protection, and inception of a global fund to leverage digitally-sequenced genetic data for equitable benefit of all. While the inclusive approach is a step in the right direction, performance on finance commitments lagged at 0.2% ($163 mn) of the target ($200 bn) under the Global Diversity Framework, indicating a need to inculcate better environmental investment strategies.
Conservation efforts alone haven’t worked. Use of advanced technology, synergy among multiple stakeholders, realistic policy goals, innovation in high impact areas and restructured business regulations to allocate attention to the issue of biodiversity loss are some areas worth exploring. Cost of replacing ecosystem services is far more than that of preserving them. For instance, urban planning with nature-positive infra can lead to creation of eco- bridges, while generating 38 mn employment opportunities by 2030 globally.
Further, measures need to inculcate that loss of natural capital can’t be replaced in totality by anthropogenic capital. Flexibility in policy tools needs to accommodate solutions to often invisible, but long-term, implications of depletion of biodiversity.
Finally, laws and institutional design should be strengthened at all levels to foster greater accountability. An integrated approach to address economic prosperity and enabling biodiversity together can translate into lasting outcomes.
The writer is chair, Institute for Competitiveness, Gurgaon. Inputs from Vidhi Tiwari