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Natural resources provide livelihoods for billions of people. When managed well, renewable natural resources, watersheds, productive landscapes, and seascapes provide the foundation for sustained inclusive growth, food security, poverty reduction, and human wellbeing. A clean environment is also key to ensure that people can lead healthy and productive lives, and that public and private resources can be invested in advancing development instead of remediating pollution. The world’s ecosystems regulate the air, water, and soil on which we all depend, and form a unique and cost-effective buffer against extreme weather events and climate change. To achieve sustainable growth, better natural resource management, environmentally-friendly fiscal policies, greener financial markets, and effective waste management programs are needed globally.

The global decline of biodiversity and ecosystem services is a development issue: Economies, particularly in low-income countries, cannot afford the risk of collapse in the services provided by nature. The analysis in the World Bank report, The Economic Case for Nature, shows that by a conservative estimate a collapse in select services such as wild pollination, provision of food from marine fisheries and timber from native forests, could result in a significant decline in global GDP: $2.7 trillion in 2030. Relative impacts are most pronounced in low-income and lower-middle-income countries, where drops in 2030 GDP may be more than 10 percent. 

The reports also finds that nature-smart policies can reduce the risk of ecosystem collapse and are “win-win” policies in terms of biodiversity and economic outcomes. A combination of carefully crafted and coordinated policies, particularly those supporting innovation, can simultaneously benefit biodiversity and development 

The nature and climate change agendas are complementary and there are synergies to be exploited to foster green, resilient, and inclusive development. The benefits of nature-smart policy increase substantially when the carbon sequestration services of nature are factored in.  

The loss of biodiversity and ecosystem services is a development issue, often impacting the poorest countries the most. Healthy ecosystems and the services they provide are essential for the long-term growth of economic sectors such as agriculture, forestry, and fisheries. More than half of global GDP is generated in industries that are highly or moderately dependent on ecosystem services, such as pollination, water filtration, and raw materials. Over 3 billion people depend on marine and coastal biodiversity for their protein intake and livelihoods. Three quarters of the world’s top 115 food crops depend on animal pollination. In developing countries, forests, lakes, rivers, and oceans provide a significant share of households’ diets, fuel, and incomes, and represent a precious safety net in times of crisis, particularly for the poor who live in rural areas.

The integrity and functionality of these vital natural assets, however, are increasingly compromised, with 60 to 70 percent of the world’s ecosystems degrading faster than they can recover. Mismanagement of the environment and natural resources results in significant economic losses: for instance, an estimated $80 billion are squandered each year due to ocean fisheries mismanagement. Air pollution is the leading environmental risk to health, costing the equivalent to 6.1 percent of global GDP per year. Nature is under threat and one million animal and plant species, out of a total estimate of 8 million, risk extinction, many within decades, according to the latest report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES). Fourteen out of eighteen categories of ecosystem services have declined since 1970.

The COVID-19 pandemic underscores the links between human health and nature, as about 70 percent of emerging infectious diseases are from zoonotic origin.  Pathogens thrive where there are changes in the environment, like deforestation, and natural ecosystems are under stress from human activity and climate change.  

While nature can act as a buffer between humans and pathogens, it can also help in economic and social development. Investing in nature can contribute to economic recovery by creating jobs, targeting the poorest communities, and building long-term resilience. Healthy ecosystems support climate change mitigation and increase the resilience of the most vulnerable communities around the world. Recent World Bank research makes an economic case for investing in nature and assesses policy options to the global biodiversity crisis.

Last Updated: Oct 05,2022

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