Current trends in environmental degradation will lead to large economic losses in the coming decades, hitting the poorest countries hardest, according to a new study led by Purdue University and the University of Minnesota. The study also finds that investing in nature can turn those losses into gains.<\/p>\n

The findings, published in Proceedings of the National Academy of Sciences, develop a novel, 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 affect the economy overall.<\/p>\n

\u201cTraditional economic models almost completely neglect the fact that the economy relies on nature,\u201d said study co-author\u00a0Thomas Hertel<\/a>, Distinguished Professor of\u00a0Agricultural Economics<\/a>\u00a0at Purdue. \u201cThis 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 the environmental consequences of these changes.\u201d<\/p>\n

The study\u00a0was led by Justin Johnson of the University of Minnesota. Along with Hertel, co-authors include Purdue\u2019s\u00a0Uris Lantz Baldos<\/a>\u00a0and\u00a0Erwin Corong<\/a>, both of the\u00a0Center for Global Trade Analysis<\/a>, as well as Steve Polasky, co-leader of\u00a0Global to Local Analysis of Systems Sustainability (GLASSNET)<\/a>, and other collaborators at the University of Minnesota, the World Bank and Canada\u2019s University of Victoria.<\/p>\n

The researchers combined multiple models to achieve their results. One was Purdue\u2019s\u00a0Global Trade Analysis Project (GTAP) model<\/a>, which performs quantitative analyses on a wide range of interconnected international economic issues.<\/p>\n

The other suite of models, called\u00a0Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST)<\/a>, was developed at Stanford University\u2019s\u00a0Natural Capital Project<\/a>. GTAP and InVEST are both widely used globally by government policymakers, nongovernmental organizations and the private sector.<\/p>\n

\u201cWe have long thought of the economy and the environment as working against each other,\u201d said the study\u2019s lead author, Johnson, assistant professor of applied economics at the University of Minnesota. \u201cInvesting in nature does not stifle the economy; it boosts the economy. But it has been difficult to model those interactions until recently.\u201d<\/p>\n

Hertel founded GTAP 30 years ago. GTAP has since grown into a global network of 26,000 members who contribute data and expertise from 160 countries and regions. Purdue\u2019s GTAP economists assemble and connect the data to various modeling frameworks. Economic flows are categorized into 65 sectors: 20 in agriculture and food, 25 in manufacturing, and 20 in services.<\/p>\n

\u201cThe database now covers 98% of global gross domestic product in great detail,\u201d Hertel said. And the database links agriculture and many other aspects of national and global economies. \u201cThat\u2019s important for the kind of study we have here,\u201d he said.<\/p>\n

The integrated GTAP-InVEST model expands upon similar policy-related work published by the\u00a0World Wildlife Fund in 2020<\/a>\u00a0and the\u00a0World Bank in 2021<\/a>.<\/p>\n

\u201cWe hope to make this kind of analysis a standard tool in a policymaker\u2019s toolbox,\u201d Johnson said.<\/p>\n

The new study examined policy options for investing in nature, including removing agricultural subsidies, financing research into improving crop yields, and international payments for wealthy countries to poorer countries to support conservation. The policies resulted in annual gains of $100 million to $350 million in 2014 U.S. dollars. The largest percentage increases in GDP occurred in low-income countries.<\/p>\n

Continued trends in environmental degradation, by contrast, would result in $75 billion in losses annually. This included low-income countries suffering 0.2% losses in GDP every year. These results highlight how public goods and services provided by the environment are often the most important for the world\u2019s poorest, who have less access to alternative options in a degrading environment. Investing in nature thus tends to make the world more equitable, the researchers said.<\/p>\n

The study was funded by Purdue, the University of Minnesota and the\u00a0National Science Foundation<\/a>\u00a0and exemplifies what the two universities strive to achieve in their GLASSNET project. The Purdue-based GLASSNET is an international network of networks devoted to sustainability analysis.<\/p>\n

\u201cOne theme behind GLASSNET is this idea of global to local to global,\u201d Hertel said. \u201cIt\u2019s bridging the global with the local because all sustainability issues are ultimately very local.\u201d<\/p>\n

If pollinating insects, for example, can no longer reach crops in certain areas, reduced yields result. That, in turn, reduces profits, showing the link between nature and the economy, Hertel said.<\/p>\n

The new research looked at only a small subset of the ways that the economy and the environment interact, yet still found strikingly large effects. Hertel and his colleagues expect an entire line of research to continue developing along these lines.<\/p>\n

\u201cWe would like to broaden GLASSNET coverage of ecosystem services,\u201d he said. \u201cThere are many important services nature provides that aren\u2019t quantified here \u2013 groundwater, for example. There\u2019s a lot more to be done.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"