WWF: Environmental degradation on course to cost global economy £8tr

Rising food prices, droughts, commodity shortages, extreme flooding, and coastal erosion will ravage economies around the world if action is not taken to confront the multiple environmental crises facing humanity, according to a new study launched today at the Royal Society in London.

Continuing current rates of environmental degredation will result in costs of at least £368bn a year, the WWF's Global Futures report calculates, leading to total losses of £8tr by 2050.

Using an innovative methodology developed by the WWF, the Global Trade Analysis Project, and the Natural Capital Project, the study compares the costs associated with the decline in natural assets across 140 countries.

It predicts the UK will suffer some of the biggest financial losses, taking an annual hit of at least £16bn by 2050, outstripped only by the US and Japan. The prospective UK economic losses match the current combined annual fundingfor the police, fire service, prisons, and law courts, with the main economic costs stemming from the loss of natural coastal protection services leading to flooding and erosion, alongside the accelerated decline of global fish stocks harming the fishing industry.

"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," said Katie White, executive director of advocacy and campaigns at WWF. "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." 

While richer nations will experience the largest gross impacts, developing nations are expected to shoulder a disproportionately large burden, the report adds. Water shortages and a decline in pollinators will affect agricultural production levels, trade, and food prices across Eastern and Western Africa, central Asia and parts of South America, the study predicts.

The study also estimates economic costs arising from the loss of specific ecosystem services. For example, it predicts that by 2050 the loss of natural coastal protection services could result in yearly costs of £251bn, while the disappearance of natural carbon storage in forests and peatbogs could cost £98bn a year and impacts on water supply for agriculture could cost £14bn.

Tied to these impacts, the study predicts global price rises for key commodities by 2050, forecasting that timber prices will rise by eight per cent, cotton by six per cent, oil seeds by four per cent, and fruit and vegetables by three per cent.

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, the study concludes.

"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," said Professor Thomas Hertel, founder of Global Trade Analysis Project (GTAP), responding to the findings.

"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 WWF is backing measures to reverse the loss of biodiversity by 2030, such as the Dasgupta Review on the Economics of Biodiversity in the UK and its own campaign for a New Deal for Nature and People. In January, the UN launched its own framework to reverse what it called "rapid declines in biodiversity," calling for action to ensure 30 per cent of the world's land and seas are protected by 2030 ahead of this year's crucial Biodiversity COP Summit in China.