Equivalent of one-quarter of global GDP lost annually, report by 165 scientists finds
The global economy is losing up to $25tn a year because sectors such as agriculture, energy and fishing fail to account for how their actions fuel interconnected crises in nature, climate and human health, a landmark international biodiversity science policy report found.
Tackling biodiversity loss, climate change, water scarcity, food insecurity and health risks in isolation was not only compounding those issues but also driving spiralling economic costs, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) said. The body established by 94 countries is the equivalent of the Intergovernmental Panel on Climate Change, bringing together authoritative global agreement on science.
“By treating these as individual problems, we are wasting money, we’re duplicating efforts,” Pam McElwee of Rutgers University and a co-author of the report. “And if we were actually able to bring policy sectors together, there would be significant cost savings.”
The report, approved by IPBES member states in Namibia on Monday after three years of work by 165 scientists, estimated that unaccounted-for costs from current business practices were between $10tn and $25tn annually, equivalent to a quarter of global GDP. These costs arise when industries fail to factor in the damage their operations cause across systems.
For example, unsustainable farming practices may boost yields in the short term, but the overuse of chemical inputs causes run-off pollution, which harms water quality downstream and increases human health burdens, including waterborne diseases.
“The problem with our current system is that we don’t have a way to account for those trade offs in decision making right now, we essentially ignore them,” said McElwee. “We pass those costs on, whether it’s to insurance companies or to poor and marginalised people who are suffering from these pollution burdens or the malnutrition burdens.”
Treating the crises as a “complex, interconnected system” was essential, she added, stressing the need for meaningful discussions about trade-offs in business decisions.
