Climate models potentially underestimate economic damages from biodiversity losses by a factor of two to four Jul 07, 2020
Prof. dr. Robert MALINA
Leading climate damage models used by policymakers to develop climate policy underestimate the economic damages from biodiversity losses. This is one of the main conclusions by a group of researchers from Hasselt University (Belgium), the Australian National University and the University of Waterloo (Canada) that studied 40 years of evidence on the value of biodiversity protection. They find that the economic value of biodiversity may be two to four times higher than currently assumed in climate damage models. According to the researchers, “Existing climate damage models used to estimate the economic damages from future climate change may have to be adjusted upwards. This is a particularly urgent issue, given the upcoming climate assessment report of the Intergovernmental Panel on Climate Change which is due in 2022”.
The researchers reviewed studies executed over the last four decades that estimate the value of biodiversity protection. Anne Nobel, PhD student at Hasselt University and first author of the study: “We analyzed 62 studies, from all over the world, in which people were asked how much they are prepared to pay for biodiversity conservation. These studies focused on so-called existence values, or non-use values of biodiversity. Such values arise when people want to conserve species, habitats or ecosystems, without ever seeing or using them.” Overall, the study shows that people are prepared to pay on average between 0.2% and 0.4% of per capita GDP per year for the protection of biodiversity against negative impacts caused by human activity, and that people value biodiversity losses significantly higher if they are caused by human activity impacts instead of by natural drivers.
The findings of the study starkly contrast with the assumptions adopted in several leading models that predict overal societal damages from climate change. Climate damage models are used to determine how much climate action should be taken today in order to avoid climate damage in the future. These models include a damage component that estimates the size of damages results from each additional degree of global warming. Biodiversity loss is one of the damage components, and it is set to 0.1% of GDP per capita per year in several of these models. This value of based on assumptions made in the early development of climate impact models, and has not been updated since. “Our analysis suggests that the general public may be prepared to pay up to four times more for the protection of biodiversity than currently assumed in climate impact models”, concludes Professor Robert Malina, Director of the Centre of Environmental Sciences at Hasselt University and senior author of the study. “In other words: The costs of biodiversity loss due to global climate change may be significantly underaccounted for in these models.”
Climate assessment report 2022
The conclusions made by the researchers are particularly timely given that the Intergovernmental Panel on Climate Change (IPCC) is currently preparing the next climate Assessment Report, which will be released in 2022. The IPCC estimated in its 5th Assessment Report in 2014 that a global temperature increase of 2.5 degrees Celsius in 2075 will lead to economic damages of between 0.2% and 2% of GDP per year. “However, this estimate is based, among other models, on several climate damage models in which the non-use value of biodiversity is potentially significantly underestimated”, Nobel states, “and this means that the overal economic damages from global warming could potentially be higher when our findings are taken into account.”
Updating climate damage models
As a consequence, there is an urgent need to for researchers to re-evaluate current climate damage models. Malina summarizes: “Climate damage models provide the scientific basis for investing in measures to reduce global warming such as clean technologies. Investment should potentially be higher if our conclusions are taken into account because the economic damages prevented by such investments are larger than currently assumed. By adjusting climate damage models, better decisions can be made with respect to climate policy”.
Hilde Eggermont, coordinator of the Belgian Biodiversity Platform and National Belgian Focal point for the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), who was not involved in the study, comments on the relevance of the findings: “This new study sheds a very interesting light on the role of the non-use value of biodiversity in climate policy evaluation. The results also show that public support for measures to counteract the impact of climate change on biodiversity depends on public understanding that this impact is in fact anthropogenic. The results are particularly relevant in the context of the ongoing IPBES evaluation on ‘values’ which aims to map the many perspectives on the value of nature as a basis for sustainable management of natural resources.”
This research was published in a Special Issue on Evidence Synthesis for Climate Solutions in the influential journal Environmental Research Letters