Biodiversity loss: the next crisis

WHEN we hear the names "Rio", "Cartagena", "Nagoya" or "Aichi" we think about cities but not about biodiversity. When we hear the word "coronavirus" all of us have many associations - but few of us would think immediately about biodiversity either. This is a missed opportunity.

Coronavirus will not be a one-off event. The number and diversity of epidemic events has been increasing over the past 30 years and the WHO reckons that over 60 per cent of infectious diseases reported globally have been "zoonotic" in nature, meaning that they were spread from animals to humans - as appears to have been the case with the current coronavirus. Not surprising, powerful global changes, such as growth in connectivity, growth of urbanisation with high-density living, increased deforestation as well as growing displacement of people and climate change, reinforce this development.

The emergence of these zoonotic diseases is often associated with biodiversity loss. Their exact causes are debatable but deforestation driven by logging, mining and road-building and the expansion of urban areas, as well as the wildlife trade, has brought people into close proximity with animal species they would never normally go near.

In our increasingly "cultivated planet", a virus can then get access to a vast number of homogenous biological systems (ie 7.8 billion human beings and 30+ billion livestock), to transmit across with ease and speed.

Humans, in their pursuit of growth and prosperity, do not give biodiversity the priority it needs. It is estimated that humans - representing only 0.01 per cent of all living things on this planet - have already caused the loss of 83 per cent of all wild mammals and half of all plants.

When ecosystems are broken, often through biodiversity loss, these can trigger catastrophic events - sometimes locally, sometimes (as with climate change) globally. It comes as no surprise that biodiversity loss is regarded by the OECD and the World Economic Forum as one of the top five risks in terms of both likelihood and impact in the next 10 years. Of course, we need to think about this in conjunction with climate change, but biodiversity merits more attention.

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Biodiversity's economic bounty

It is estimated that around US$125-US$140 trillion of economic value generated each year is in some way dependent on nature. Just for a perspective, this is more than one and a half times the size of global GDP. Such economic value comes from food production (eg crop pollination), water purification, flood protection and climate-change mitigation (eg carbon sequestration), for example.

More important, consider the economic costs when we ignore biodiversity. Destruction of specific ecosystems like mangroves, peatlands and tropical forests for agriculture and other uses is equivalent to 13 per cent of total human CO2 emissions, or roughly 4.7 billion tonnes of CO2 and exacerbates the effects of climate change. (Asia alone emits 19 billion tonnes of CO2, which represents 53 per cent of global emissions.)

Biodiversity also directly contributes to our food security through the factors described above. But this cannot be taken for granted: estimates suggest that the mean species abundance may have fallen by 30 per cent since industrialisation began and this threatens to run through all the contributors to the biosphere - from genes through species populations, ecosystems and biomes.

Targets are needed

While the Paris Climate Accord got a lot of press lately, an equally important international commitment - the 10 year Aichi targets - to preserve the world's most threatened ecosystems - appears to have been largely disregarded, with the deadline expiring at the end this year. EU biodiversity strategy 2020 appears to have met a similar fate.

Part of the problem is the very diversity of biodiversity: it is more difficult to define a specific measurement or a single meaningful goal. Contrast this with the simple message of the Paris climate protection agreement to limit the rise in the global average temperature to 2°C.

There is now an opportunity to make good the Aichi failings. Ahead of the upcoming 2021 global biodiversity conference in Kunming, a "zero draft" for new biodiversity framework was released earlier this year. It proposes five long-term goals related to the 2050 Vision for Biodiversity. The achievement of all goals for conserving and sustaining biodiversity depends on transformative changes across economic, social as well as political and technological factors.

Economic and investment implications

Attempts to deal with the impact of failing ecosystems have already created innovation in products and services. Desalination has been one response to a growing scarcity of freshwater. Ecotourism, organic food and FSC (Forest Stewardship Council) certified products are other examples of new businesses that have taken advantage of this area. Use of modern technology and data may provide many other business opportunities as we seek ways to limit biodiversity loss.

Perhaps the key point here is to see that addressing biodiversity - just as in ESG investment more broadly - is not necessarily a limiter on economic growth or on financial performance. More efficient approaches to issues such as energy usage and waste management do not necessarily reduce employment.

In fact, one tentative estimate is that a transformation to a "nature-positive" economy (through eg regenerative agriculture, less resource-intense food production, compact built environment or design circular models) might offer US$10 trillion of annual business opportunities and 395 million jobs by 2030 in the three socio-economic systems, namely food, land and ocean use; infrastructure and the built environment; and energy and extractives - as nature is an asset that delivers regenerative returns.

Biodiversity may not be captured by a linear world view. Systemic failure may not be evident in advance but (like a financial "fat tail event") will have major and long-lasting implications. We all need to work together to avoid failure here - and ensure continued inclusive economic prosperity.