Investing in nature improves equity, boosts economy

Date:
June 26, 2023
Source:
University of Minnesota
Summary:
A new study shows that current trends in environmental degradation
will lead to large economic losses in the coming decades, hitting
the poorest countries hardest. But there is hope: investing in
nature can turn those losses into gains.


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FULL STORY ==========================================================================
A new study shows that current trends in environmental degradation will
lead to large economic losses in the coming decades, hitting the poorest countries hardest. But there is hope: investing in nature can turn those
losses into gains.

Researchers from the University of Minnesota and Purdue University
published their findings inProceedings of the National Academy
of Sciences. The team developed a first-of-its-kind, global
earth-economy model to capture interactions between the economy and the environment. Crucially, these interactions include how nature benefits
humans by pollinating crops, providing timber, storing carbon, and
providing catch for marine fisheries, and how those benefits end up
affecting the economy overall.

"We have long thought of the economy and the environment as working
against each other," said Justin Johnson, an assistant professor of
Applied Economics at the University of Minnesota. "Investing in nature
does not stifle the economy, it boosts the economy. But it has been
difficult to model those interactions until recently." The researchers
found:
* Policy options for investing in nature resulted in annual gains
of $100-
350 billion (2014 USD), with the largest percentage increases in
GDP occurring in low-income countries. The policy options examined
in this study include removing agricultural subsidies, financing
research into improving crop yields and international payments
from wealthy countries to poorer countries to support conservation.

* Continued trends in environmental degradation, on the other hand,
would
result in $75 billion losses annually, with the low-income countries
suffering from 0.2% losses in GDP year on year.

The researchers combined a global general equilibrium economic model,
GTAP (developed at Purdue University's Center for Global Trade Analysis),
with a suite of ecosystem service models, InVEST (developed at Stanford University's Natural Capital Project). GTAP and InVEST are both widely
used across the world by governments, non-governmental organizations
and the private sector, but putting them together was a significant undertaking.

"Traditional economic models of this kind almost completely neglect the
fact that the economy relies on nature," said Tom Hertel, a distinguished professor of Agricultural Economics at Purdue University. "This new
study required a detailed understanding of how and where land use
patterns change as a result of economic activity, with enough spatial
detail to understand environmental consequences of these changes. It
is a huge achievement." The results from this research highlight how
public goods and services provided by the environment are often most
important for the world's poorest, who have less access to alternative
options when the environment is degraded.

Consequently, investing in nature tends to make the world a more equitable place. This research only looks at a small subset of the ways in which
the economy and the environment interact, nevertheless finding strikingly
large effects.

"Of course nature provides much more than pollinators, timber, carbon
and fish," said Johnson. "Our future work will incorporate many more
ecosystem services, leading to much more informed decision-making. This
is just the beginning: we hope to make this kind of analysis a standard
tool in a policy- maker's toolbox." Financial support for the study came
from the University of Minnesota, Purdue University and the National
Science Foundation. Researchers from the World Bank and the University
of Victoria also contributed to this study.

* RELATED_TOPICS
o Plants_&_Animals
# Nature # Biology # Agriculture_and_Food
o Earth_&_Climate
# Environmental_Policy # Environmental_Issues #
Environmental_Awareness
o Science_&_Society
# Economics # Land_Management # Environmental_Policies
* RELATED_TERMS
o Catastrophe_modeling o Coastal_erosion o Economic_growth
o Privacy o Sustainable_land_management o Cyclone_Gafilo o
Environmental_impact_assessment o Judicial_power

========================================================================== Story Source: Materials provided by University_of_Minnesota. Note:
Content may be edited for style and length.


========================================================================== Journal Reference:
1. Justin Andrew Johnson, Uris Lantz Baldos, Erwin Corong, Thomas
Hertel,
Stephen Polasky, Raffaello Cervigni, Toby Roxburgh, Giovanni Ruta,
Colette Salemi, Sumil Thakrar. Investing in nature can improve
equity and economic returns. Proceedings of the National Academy
of Sciences, 2023; 120 (27) DOI: 10.1073/pnas.2220401120 ==========================================================================

Link to news story: https://www.sciencedaily.com/releases/2023/06/230626164149.htm

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