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Biodiversity is an essential element of life, the very fabric of "natural capital." The enormous variety and complex interactions between species, no matter how small or insignificant they might seem, keep our ecosystems functional and make our economies productive. Nature sustains livelihoods, provides nutritious food, supplies clean air and water, acts as a buffer against pandemics, mitigates climate change, and gives protection against extreme weather events.

Our biodiverse planet is threatened by unprecedented pressures from land use change, overexploitation, pollution, climate change, and invasive species – driven mostly by human activities. One million animal and plant species, out of a total estimate of 8 million, risk extinction, many within decades, according to the 2019 landmark assessment report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). Less than 13 percent of wetlands present a few centuries ago remain today and live coral reefs have nearly halved in the past 150 years, while a third of fish stocks are over-exploited. Although the pace of deforestation has slowed globally since the 1990s, it remains high with average net deforestation rate of about 5 million hectares per year (FAO 2020), affecting critical animal and plant habitats.

For the World Bank, the global decline in nature, understood as biodiversity and ecosystem services, is a critical development issue. The impacts of declining ecosystem services fall disproportionately on developing countries, including the poorest and most vulnerable populations.  Recent World Bank research estimates that, Sub-Saharan Africa and South Asia could forego 9.7 percent and 6.5 percent of their GDP annually by 2030, if vital ecosystem services, such as pollination, timber provision from forests, and food from marine fisheries collapse. The compounding impacts of nature loss, climate change, and pollution threaten hard-won development gains.

Nature loss is strongly linked to today’s most pressing development challenges. Nature’s services underpin food security, for example, as 75 percent of food crops rely, at least in part, on animal pollination and US$235 billion to US$577 billion of annual crop output is directly attributable to animal pollination (IPBES 2019; 2016). Already, 14 of the 18 assessed categories of ecosystem services have declined since 1970 (IPBES 2019). This means smaller fish catches, pollinator decline, poorer freshwater quality, and reduced ability of nature to control pathogens. The World Bank also estimates that crimes affecting natural resources and the environment inflict damage on developing countries worth more than $70 billion a year.

Nature loss and climate change are strongly interconnected: neither one can be solved independently from the other. As underscored by the World Bank Group Climate Change Action Plan 2021-2025, ecosystems play key roles in capturing and storing carbon and in mitigating the impacts of climate change. Climate change and ecosystem degradation combined can push the planet ever closer to irrevocable tipping points. Terrestrial and marine ecosystems sequester around 60 percent of gross annual anthropogenic carbon emissions, so their loss or degradation result in more carbon in the atmosphere. Without wetlands, coastal areas lack crucial protection from storm surges; when forests are lost, water supplies suffer, and torrential rains are likelier to cause landslides.

The value of nature for human prosperity and development is clear, but this is often not reflected in decisions of policymakers, investors, and consumers. Market, policy, and institutional failures are keeping economies on unsustainable development paths.  For example, misaligned policy and subsidies incentives place a negative price tag on nature’s services. The volume of subsidies that are harmful to development is at least five to six times more the amount of funding devoted to protecting biodiversity. Similarly, private finance in support of nature remains insufficient, despite growing interest in sustainable investment.

Last Updated: Oct 13, 2022

The World Bank