Nature Losses Threaten Emerging Economies

More than half of worldwide GDP is moderately or highly dependent on nature, putting biodiversity loss among the top five risks to the global economy, according to a report presented at the World Economic Forum (WEF) in Davos, Switzerland

Small-scale slash-and-burn agriculture is one of the
deforestation problems in Brazil’s Amazon jungle. Credit: Mario

By External Source
Jan 24 2020 (IPS)

More than half of worldwide GDP is moderately or highly
dependent on nature, putting biodiversity
loss among the top five risks to the global economy, according to a
report presented at the World Economic Forum (WEF) in Davos,

The report, compiled by WEF in collaboration with accountancy
firm PricewaterhouseCoopers (PwC), finds that some of the
fastest-growing economies in the world are particularly exposed to
nature loss, and calls for “a radical reset of humanity’s
relationship with nature”.

Around one-third of the GDP of India and Indonesia comes from
sectors that are highly dependent on nature, such as agriculture,
construction and food and drink, according to the analysis. Africa
generates 23 per cent of its GDP in such sectors while in Latin
America, the figure is 55 per cent.

These industries rely on extraction of resources from forests
and oceans, or rely on nature to provide things like healthy soils,
clean water,
pollination and a stable climate,
the document explains.

“Given their significant nature dependencies, it is critical
that these economies with significant exposure to nature loss
assess, prioritise and invest in nature,” said the
Nature Risk Rising
report, presented at the global gathering of
business and political leaders on 19 January.

Failure to do so could result in heavy losses for
nature-dependent sectors, authors warn. The report says 60 per cent
of coffee varieties are in danger of extinction due to climate
change, disease and deforestation. If these varieties became
extinct, the global coffee market—with retail sales of $83
billion in 2017—would be “significantly destabilized, affecting
the livelihoods of many smallholder farmers”,
it says.


Risk to life and livelihoods

The report also highlights the pharmaceutical industry’s
dependence on tropical forest biodiversity, such as in the Amazon,
for new drug discoveries, with 25 per cent of drugs used in modern
derived from rainforest plants.

“As tropical forests face threats from felling and wildfires,
pharmaceutical companies face losing a vast repository of
undiscovered genetic materials that could lead to the next medical
– and commercial – breakthrough,” it warns.

It says that 75 per cent of approved anti-tumour pharmaceuticals
in the last 70 years have been non-synthetic, with 49 per cent
derived entirely from natural products.

Amazon deforestation – which has resulted in the loss of 17
per cent of forest cover since 1970 – could also lead to huge
agricultural production losses and longer periods of drought,
affecting water availability across the region, the report

Akanksha Khatri, head of WEF’s nature and biodiversity
initiative, who worked on the report, told SciDev.Net: “Latin
American economies are especially dependent on nature. Two of the
main economic sectors in Latin America are mining and agriculture
which currently are in the top five industries driving nature

“As the impact from nature loss intensifies, soon the
economies and people’s livelihoods associated with these sectors
will be put at risk,” said Khatri, who believes that countries
must treat their diverse resources as valuable knowledge-banks.

“Models suggest that if 20-25 per cent of the Amazon forest is
lost, this would lead to increased duration of droughts in the
region and annual agricultural production losses of $422 million in
Brazil alone.”

Amazon forest losses due to fires in 2019 –
many of them started intentionally
– are related to cattle
rearing and agricultural exports such as soy, said Hernán
Giardini, coordinator of forest campaigns at Greenpeace Argentina,
Chile and Colombia.


Trade deal impacts

Amazon deforestation linked to cattle rearing also threatens to
derail the not-yet-ratified EU-Mercosur trade agreement after 20
years of negotiations, the WEF warns.

Trade between the two blocs is worth 122 billion Euros and the
deal is expected to generate significant new market opportunities
through the reduction or elimination of tariffs. However, some EU
countries reject products coming from regions with a high environmental

“Brazil is the leading meat exporter worldwide, but at the
same time the deforestation generates conflicts in Europe, where
sectors ask their governments not to import products from South
America with such low environmental standards,” explained

“This is the reason why Amazon fires are jeopardizing the
deal, which is also tied to the Paris Agreement and other climate

Luciana Ghiotto, researcher at Argentina’s scientific and
technical research council, CONICET, and the National University of
San Martin, Argentina, is the co-author of a broad analysis of the
EU-Mercosur deal.

She said: “For Mercosur countries, the agreement implies a
deepening of extractivist industries, in particular cows and soy,
but it raises criticisms over the consequences for the Amazon and
over the need to use more pesticides for agricultural

“Curiously, it’s European companies that ship their chemical
products to South America after they are forbidden in European
countries,” she added.


Business case for action

For the reasons above, biodiversity loss is one of the five
human threats for the next decade, according to another report on
presented 15 January at the WEF.

The reports are part of the New Nature Economy series, being
published by WEF this year, making a business case for action on
what it calls the “nature crisis”. It comes ahead of the UN
Convention on Biological Diversity COP15 to be held in Kunming,
China, in October.

The reports seek to identify “priority socioeconomic systems
for transformation” and “scope the market and investment
opportunities for nature-based solutions to environmental
challenges”, the WEF says.


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Nature Losses Threaten Emerging Economies
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Nature Losses Threaten Emerging Economies