There is a huge gap between the efforts taken for conservation of the environment and the global economic value generated from actions dependent on nature, the latest IPBES report has found.
The estimated annual support needed to sustainably manage biodiversity and maintain ecosystem integrity is between $722 billion and $967 billion per year, leaving a biodiversity financing gap of $598-824 billion per year, depending on the source, the report stated.
“Efforts for conserving, restoring and sustainably using biodiversity, nature, nature’s contributions to people, including ecosystem services, are significantly under-resourced in relation to the global economic value generated by activities dependent on nature,” the report noted.
“Global public explicit subsidies to sectors directly driving nature’s decline ranged within $1.4 and $3.3 trillion for 2023, depending on the source. Agriculture ($520-851 billion) and fossil fuel ($440-1,260 billion) are the sectors receiving more subsidies. Road and irrigation infrastructure ($254-938 billion), forestry ($55-175 billion), and fisheries ($41-60 billion) are also heavily subsidised,” it said.
The report found no global estimates for the mining sector.
It also said the same factors were responsible for environment quality decline in terms of air and water pollution and soil degradation, but not factoring in their effects of an economic activity affecting the environment, such as greenhouse gas emissions, water pollution, or soil degradation. This was not reflected in market prices amounting up to $10.7 trillion per year in 2023.
The authors said at present about $135-$156 billion (inflation-adjusted to 2023) are annually spent towards biodiversity conservation. But restoration and regeneration efforts will demand more investments, projected to exceed one trillion dollars per year.
It also found that existing policies such as subsidies are directly driving biodiversity decline.
The document observed that over half of the world’s Gross Domestic Product (GDP), estimated at about $58 trillion in 2023, is generated from areas dependent on nature.
In 2020 though, highly dependent nature-based industries generated about 15 per cent of global GDP and moderately dependent industries produced 37 per cent.
Besides the financial gaps, the report also highlighted that current reasons for biodiversity decline and nature’s loss are driving inequalities and injustices, and benefitting the wealthy more, who have greater capacity to act.
It said wealthy actors benefited more from actions taken to dominate nature for achieving personal material gains, levels of consumption and patterns of reproduce extraction, consequentially generating negative effects in nature and worsening the marginalisation of other people.
The analysis pointed out current policies that include financial, economic and regulatory tools such as regulations, taxes, fees and tradable permits, have significant negative effects on nature-friendly practices.
“In 2021, the share of global wealth held by the top 1 per cent of the global population was 39.2 per cent, while the bottom 50 per cent owned 1.85 per cent of global wealth. In 2015, Europe and North America held 84 per cent of the world’s wealth per capita leaving the rest of the world holding only 16 per cent,” the report said.
The assessment recognised such concentration of wealth and inequalities as a challenge to transformative change and prevention of biodiversity loss.
“For example, the challenge of economic and political inequalities manifests as a barrier when wealth and power shape policy, or when decisions about investments are made according to shareholder interests and profit, rather than public interest, including biodiversity conservation, restoration and sustainable use,” it said.
It added that the power equation within the international monetary and financial systems influences biodiversity finance further, entrenching structural inequalities by hampering policy autonomy and limiting institutional change towards distributional equity and justice.
System lock-ins, such as path dependencies, compartmentalised and/or short-term thinking and concentration of power also impede transformative practices, it added.
The powerful economic system focused on market-driven development, investment and export-focused growth reduces nature to single economic value and devalues other ways to value it.
Removing, phasing out or improving economic incentives harmful for biodiversity can significantly reduce pressure on nature and realign the resources for conservation and suitable use of biodiversity, according to the report.