In a collaboration with University of Minnesota researchers, a World Wildlife Fund report published last month found that the global economy stands to lose $10 trillion by 2050 if actions are not taken to address climate change.
Using a combination of environmental and economic modeling, WWF's work is part of an ongoing initiative that looks to illustrate the value of nature conservation.
If countries continue to operate under a “business as usual” approach and do not change current consumption habits or business practices, the global economy will lose trillions, with the United States being the most affected.
“The economy is [currently] operating as if nature doesn't matter,” said Stephen Polasky, an environmental economist at the University who contributed to the report. “In order for us to do better going forward, we really have to integrate these values of nature into economic decision-making.”
Justin Johnson, a senior scientist and economist at the University's Institute on the Environment, has been developing modeling systems for the report that allow researchers to better understand and quantify the economic value of nature.
Through a combination of applied economics and environmental mapping, the team uses satellite technology to analyze different landscapes and ecosystems around the world.
Polasky said this interdisciplinary approach is relatively uncommon.
“Most of economics operates [with] need to understand markets and incentives. You're not trained in earth system sciences,” he said. “My hope is that 10 years from now this kind of analysis is basically viewed as routine rather than unique.”
Based on the geographical data, researchers can calculate the landscape’s susceptibility to things like carbon storage or erosion and can predict how local economies will be affected by the damage done by climate change.
They predict that, if countries begin to follow an alternative “Global Conservation” approach, the United States economy stands to gain $11 billion by 2050.
“The key of this is a shift toward renewable resources,” said Johnson.
Their “Global Conservation” scenario considers factors like prevention of forest loss, the reduction of carbon emissions and changes in consumption habits.
So far the team is working with the UK government and the World Bank to understand the macroeconomic impact of their findings.
Toby Roxburgh, of WWF, said this report is one of the first in-depth analyses that quantifies how environmental changes directly impact the global economy.
“This analysis has shown that increased efforts to protect nature could lead to improved environmental outcomes … and can be achieved at no economic cost,” he said. “We need a new paradigm economic model that takes us away from business as usual.”
Roxburgh said that the report will be used to raise awareness about the severity of climate change and drive policy change worldwide.
“I think everybody realizes we need to change the way we operate,” he said. “We need to reform our economic and financial systems fundamentally in order to tackle these issues.”