Economics of biodiversity
Biodiversity plays an essential role in the global economy.<ref name=":0">Millennium Ecosystem Assessment (MEA), Ecosystems and human well-being: synthesis, Island Press, Washington, DC, 2005, p. 137.</ref> This includes its role in providing ecosystem services - the benefits that humans get from ecosystems. Biodiversity plays a major role in the productivity and functioning of ecosystems, affects their ability to provide ecosystem services.<ref>Template:Cite journal</ref> For example, biodiversity is a source of food, medication, and materials used in industry. Recreation and tourism are also examples of human economic activities that rely on these benefits. In 2018, the WWF Living Planet Report argues that the whole global economy of US$125 trillion ultimately relies on nature.<ref name=":5">WWF. 2018. Living Planet Report - 2018: Aiming Higher. Grooten, M. and Almond, R.E.A.(Eds). WWF, Gland, Switzerland.</ref>
The benefits of biodiversity are often evaluated in an anthropocentric way and the inherent value of biodiversity, outside of its benefits to humanity, has been debated by economists.<ref>Template:Cite journal</ref><ref>Template:Cite journal</ref> Despite these benefits, economic activities often result in harm to biodiversity, such as through deforestation.<ref name=":0" />
The majority of species have yet to be evaluated for their current or future economic importance.<ref name=":1">Template:Cite journal</ref> Raw materials, pharmaceuticals and drug production all directly and indirectly depend upon biodiversity.<ref name=":1" />
Agriculture and food
[edit]Template:Main Template:See alsoBiodiversity plays an essential economic role in agriculture as the origin of all crops and domesticated livestock, contributing both to food security and to livelihoods.<ref>Template:Cite web</ref> Around 25% of the global population is estimated to work in agriculture.<ref>Template:Cite journal</ref> Estimating the economic value of biodiversity (and the costs of its continued loss) in agriculture and through the use of wild species for food is both challenging and controversial.
Agricultural biodiversity (agrobiodiversity) refers to all the components of biodiversity that are relevant to food and agriculture, and that make up agricultural ecosystems.<ref>Template:Cite web</ref> More specifically, the term food biodiversity refers to the diversity of organisms used for food. Agrobiodiversity provides income through food and raw materials, as well as by supporting ecosystem services that are essential for agricultural productivity, including pollination, pest control, nutrient cycling, and climate regulation.<ref>Template:Cite web</ref>
Income is generated from the harvest and sale of wild species, as well as from those that have been cultivated and domesticated. This can play an important role in supporting the livelihoods of people living in developing economies. For example, wild meat (bushmeat) is harvested by rural households in some countries to support dietary requirements and as a source of subsistence income, though the practice is controversial.<ref>Template:Cite journal</ref> The trade in bushmeat occurs both legally and illegally, for cultural reasons as well as socio-economic ones.<ref name=":8">Template:Cite web</ref>
Biodiversity includes genetic diversity, providing genetic resources for food and agriculture. The term genetic resources refers to "genetic material of actual or potential value", according to the Convention on Biological Diversity.<ref>Template:Cite web</ref> These resources are important as the raw material for evolution by natural and artificial selection to enable the development of new cultivars with higher yields, greater tolerance to abiotic stresses, and greater resistance to pests and diseases.<ref>Template:Cite journal</ref> The role of genetic diversity in reducing risk to commercial output from farms or forests has been said to contribute to the indirect economic value of biodiversity.<ref>Template:Cite journal</ref> Genetic resources may also be used in biotechnology, such as for genetic engineering, though concerns have been raised that the use of such methods could increase genetic erosion.<ref>Template:Cite web</ref> Estimating the economic value of conserving such resources is difficult<ref>Template:Cite journal</ref> and their global value is largely unquantified as a result.<ref>Template:Cite web</ref>
About 70% of crop genetic diversity and 30% of livestock genetic diversity has been lost.<ref>Template:Cite journal</ref> The loss of genetic diversity reduces the resilience of food systems to pests, diseases, abiotic stresses, and climate change, posing a threat to food security.<ref>Benton, T. G., Bieg, C., Harwatt, H., Pudasaini, R., & Wellesley, L. (2021). Food system impacts on biodiversity loss. In Policy File. Chatham House: The Royal Institute of International Affairs.</ref> These risks can reduce yields, therefore having an economic and social impact. In addition, species diversity (an aspect of biodiversity) in the global food system is relatively low when compared to the total number of described species; it was estimated that only 40 species of mammals and birds have been domesticated for agriculture and less than 200 plant species are produced on a significant scale globally.<ref name=":7">FAO. 2019. The State of the World’s Biodiversity for Food and Agriculture, J. Bélanger & D. Pilling (eds.). FAO Commission on Genetic Resources for Food and Agriculture Assessments. Rome. 572 pp. (http://www.fao.org/3/CA3129EN/CA3129EN.pdf)</ref> This compares to a total of approximately 6,400 mammal species, 11,000 avian species, and 391,000 plant species (out of which 6,000 have been cultivated for food and agriculture).<ref name=":7" />
Despite the importance of biodiversity to agriculture and its role in the global economy, the global food system is thought to be a primary driver of biodiversity loss, according to the United Nations Environment Programme.<ref>Template:Cite web</ref> For example, this may occur as a result of deforestation and land use change for agricultural expansion.
Biological pest control
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An important ecosystem function associated with biodiversity is pest control.<ref>Template:Cite journal</ref> Control species can suppress pest populations and reduce loss of crop yields without the negative impacts of chemical pesticides.<ref>Template:Cite journal</ref> This has economic benefits and maintaining natural pest control is important to humanity's ability to grow crops.<ref>Template:Cite journal</ref> It can also be applied within horticulture.<ref>Template:Cite web</ref>
Biological pest control can reduce economic losses incurred as a result of pests, disease vectors, and invasive species.<ref>Template:Cite journal</ref> However, its use can have unintended effects where control species are introduced without adequate research.<ref name=":2">Template:Cite news</ref> For example, the cane toad was introduced to Queensland, Australia in 1935 to control cane beetles that attack sugarcane roots but are now regarded as an invasive species through their damaging impacts on native species.<ref name=":2" /><ref>Template:Cite journal</ref>
Horticulture
[edit]Horticulture refers to the small-scale cultivation of plants, such as for use in gardening. It encompasses both domesticated and wild species, cultivars, genotypes, and alleles.<ref>Template:Cite web</ref> These plants may be used for food, medicine, or aesthetic and ornamental purposes.<ref>Template:Citation</ref> Horticultural plant biodiversity can be highly profitable and provides opportunities for employment.<ref>Template:Cite journal</ref> In the UK, growth of ornamental plants was worth £1.7 billion in 2023.<ref>Template:Cite web</ref>
Originally, plants for horticultural use were sourced from wild populations, but now tend to come from nurseries, botanical gardens, and private collections.<ref>Template:Cite web</ref>
Aquaculture and fishing
[edit]Aquaculture and fishing are underpinned by biodiversity, with significant economic importance globally.<ref>Template:Cite web</ref> By 2006, over 3 billion people were dependent on marine and coastal biodiversity for their livelihoods and 38 million people were estimated to be directly employed by fishing.<ref>Template:Cite web</ref> In 2023, the global fishing market was estimated to be worth $656.96 billion, based on revenue.<ref>Template:Cite web</ref>
Medicine
[edit]Template:Main article Biodiversity plays a vital role in the maintenance of human health and a wide variety of products derived from plants, animals, and fungi are used in medicine. Biodiversity acts as a source of medicinal compounds, impacts the provision of ecosystem services that improve health and protect against disease, and as an inspiration for biomedical techniques that could be utilised to cure diseases (such as CRISPR/Cas9).<ref name=":9">Template:Cite journal</ref> Over 40% of pharmaceutical products are derived from nature, identified through indigenous knowledge and scientific methods, and 70% of all cancer drugs are natural or bioinspired products.<ref name=":03">Template:Cite web</ref> This has significant economic implications. For example, the market for traditional medicine was predicted to reach a value of $115 billion by the end of 2023.<ref name=":03" />
Wild plant species have been used for medicinal purposes since pre-historic times<ref>Template:Cite journal</ref> and over 60% of the world's population still depends on herbal medicine as their primary source of healthcare.<ref>Template:Citation</ref> Some major antimalarial drugs are derived from plants. For example, quinine, derived from the bark of South American Cinchona trees is used as an anti-malarial.<ref name=":9" /> Artemisinin, another anti-malarial, was isolated from sweet wormwood by Tu Youyou.<ref>Template:Cite web</ref> In addition, anti-cancer drugs like Taxol, Vincristine, and Vinblastine were isolated from plants.<ref>Template:Cite journal</ref>
Industry
[edit]Template:See also Beyond agriculture and pharmaceuticals, biodiversity plays an important role in industry. It acts as a source of natural resources, materials, and products that are sold, consumed, or used in manufacturing. Many livelihoods are dependent on biodiversity as a result.<ref>Template:Cite web</ref> Examples of some of the raw materials that originate from biodiversity include wood, plant fibers (such as cotton), animal fibers (such as wool and silk).
Ecosystem services, relied upon by industry and businesses, are underpinned by biodiversity. As a result, estimates of the value of these services to the global economy have been made, though this practice is controversial, with an estimate of US$125 trillion a year worldwide by WWF's 2018 Living Planet Report.<ref name=":5" />
Biodiversity includes the morphological diversity of life forms.<ref>Template:Citation</ref> This can provide economic opportunities as inspiration for research and development of industrial materials and structures.<ref name=":6">Template:Cite journal</ref> For example, the ridges on pectoral fins of humpback whales have inspired the shape of wind turbine blades.<ref>Template:Cite web</ref> The field of biomimetics is dedicated to the emulation of models, systems, and elements from nature to solve complex human problems. In the United States, biomimicry is estimated to account for $425 billion of the country's GDP, according to the Fermanian Business and Economic Institute.<ref name=":6" /> This provides potential economic opportunities for developing countries with high levels of biodiversity, but has mainly been explored in developed economies.<ref>Template:Cite web</ref>
Tourism and recreation
[edit]Template:See also Through cultural ecosystem services, biodiversity provides economic benefits in the form of recreation and tourism, while also benefitting human wellbeing.<ref>Template:Cite journal</ref><ref>Template:Cite web</ref> Biodiversity influences the potential of ecosystems to provide recreational services.<ref>Template:Cite journal</ref> This includes outdoor recreation, such as hiking, hunting, fishing, and wildlife watching.
Another form of recreation supported by biodiversity is tourism. Biodiversity is "at the heart of what drives the tourism industry", according to the United Nations Environment Programme.<ref>Template:Cite web</ref> The beauty of tourist destinations or the species they support can attract tourists to visit certain areas.<ref name=":02">Template:Cite journal</ref> For example, destinations like rainforests, beaches, national parks, and nature reserves are attractive to tourists. The revenue generated through tourism is vital to many economies worldwide and accounts for 10% of the global job market.<ref>Template:Cite journal</ref><ref name=":3">Secretariat of the Convention on Biological Diversity (2009). Biodiversity, Development and Poverty Alleviation: Recognizing the Role of Biodiversity for Human Well-being. Montreal, 52 pages.</ref>
Nature-based tourism, such as to visit protected areas, also has an important economic impact.<ref>Template:Cite journal</ref> For example, ecotourism, where the motivation of tourists is to observe and appreciate nature and the cultures in natural areas, while supporting their maintenance.<ref>Template:Cite web</ref> In 2023, the global ecotourism market was estimated to be worth US$216.49 billion.<ref>Template:Cite web</ref>
Despite the economic benefits from biodiversity through tourism, the tourism industry has negative impacts on biodiversity.<ref name=":02" /> For example, through habitat destruction and pollution. As a result, sustainable tourism emerged with the aim of reducing the negative impacts of tourism on the environment.<ref>Template:Cite journal</ref>
Illegal wildlife trade
[edit]Template:See also The illegal wildlife trade profits from biodiversity through the sale of products derived from non-domesticated animals, including those classed as endangered by the IUCN. According to the Zoological Society of London, the illegal wildlife trade is estimated to be worth $23 billion a year.<ref>Template:Cite web</ref> Cultural demand (such as for bushmeat or use in traditional medicine) is one factor motivating the illegal wildlife trade, however, terrorist and criminal organisations engage in illicit trafficking of plants and animals to fund the purchase of weapons, fund civil conflicts, and other illegal activities.
Exploitation of biodiversity through wildlife smuggling has a negative impact on biodiversity itself, including by driving population declines, species extinctions, and the loss of genetic diversity.<ref>Template:Cite journal</ref> It can also impact biodiversity through biosecurity risks, including the potential to spread diseases that native populations may not be resistant to and through the introduction of alien species.<ref name=":8" />
Impact of economic activity on biodiversity
[edit]Template:SeeDespite the role of biodiversity in underpinning the economy, economic activities often cause harm to biodiversity and the economic incentives they provide mean that they are often favoured over conservation and restoration activities.<ref name=":4">IPBES (2019): Global assessment report on biodiversity and ecosystem services of the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services. E. S. Brondizio, J. Settele, S. Díaz, and H. T. Ngo (editors). IPBES secretariat, Bonn, Germany. 1148 pages. https://doi.org/10.5281/zenodo.3831673</ref> This contributes to the loss of biodiversity observed on a global scale with numerous causes, such as habitat loss, land-use change, pollution, and overexploitation.<ref name=":4" />
According to an estimate from BCG, more than 90% of the anthropogenic drivers of biodiversity loss result from economic activities linked to agriculture, infrastructure, fashion, and energy.<ref>Template:Cite web</ref> In addition, the IUCN estimates that 79% of threatened species are impacted by agriculture, infrastructure, and energy and mining activities.<ref>Template:Cite web</ref>
The failure to halt terrestrial biodiversity loss between 2000 and 2010 was estimated to cost the global economy $500 billion.<ref name=":3" /> Continued biodiversity loss and environmental degradation poses a long-term risk to society and the economy, such as by increasing the risk of pandemics, floods, and droughts.<ref>Ranger, N., Alvarez J., Freeman, A., Harwood, T., Obersteiner, M., Paulus, E. and Sabuco, J. (2023). The Green Scorpion: the Macro-Criticality of Nature for Finance – Foundations for scenario-based analysis of complex and cascading physical nature-related risks. Oxford: Environmental Change Institute, University of Oxford.</ref>
See also
[edit]- Biodiversity Action Plan
- Biodiversity finance/The Economics of Ecosystems and Biodiversity
- Environmental economics
- Endangered Species Recovery Plan
- Ecosystem services
- Food biodiversity
- Agrobiodiversity
- Biodiversity and drugs
- Payment for ecosystem services (PES)
References
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