As climate change redistributes terrestrial ecosystems across the globe, the world’s natural capital is expected to decrease, causing a 9% loss of ecosystem services by 2100. That’s according to a study of natural capital published today in the journal Nature, with the contribution of CMCC’s research.

Breathable air, clean water, healthy forests and biodiversity all contribute to people’s well-being in ways that can be very difficult to quantify. “Natural capital” is the concept scientists, economists, and policymakers use to represent the current and future flow of benefits the world’s natural resources bring to people.

A study led by scientists at the University of California, Davis, and Scripps Institution of Oceanography at UC San Diego, with the contribution of CMCC researchers Massimo Tavoni, Johannes Emmerling and Francesco Granella, highlights to what extent nature’s benefits decrease as climate change shifts ecosystems across borders.

“The big question is what do we lose when we lose an ecosystem?” said lead author Bernardo Bastien-Olvera, a doctoral student at UC Davis when the study was conducted and currently a postdoctoral fellow at Scripps. “Flipping the question: What do we gain if we are able to limit climate change and avoid some of its impacts on natural systems? This study helps us better consider damages not usually accounted for. It also reveals an overlooked, yet startling dimension of climate change effects on natural systems – its capacity to exacerbate global economic inequality.”

Profound inequalities

When countries lose natural capital, their economies suffer. The study found that, by 2100, climate change-induced changes to vegetation, rainfall patterns and higher CO₂ result in an average 1.3% reduction in Gross Domestic Product (GDP) across all the countries analyzed. It further found profound inequalities in the distribution of these impacts.

“Our research found that the world’s poorest 50% of countries and regions are expected to bear a staggering 90% of the GDP damages,” Bastien-Olvera said. “In sharp contrast, the losses for the wealthiest 10% might be limited to just 2%.”

The authors said this is largely because lower-income countries tend to rely more on natural resources for their economic production, and a larger fraction of their wealth is in the form of natural capital.

Natural and economic values

For the study, the authors used global vegetation models, climate models and World Bank estimates of natural capital values to estimate the consequences of climate shifts on countries’ ecosystem services, economic production and natural capital stocks.

These estimates may be conservative, as the analysis considered only land-based systems—primarily forests and grasslands. Bastien-Olvera plans to address marine ecosystem impacts in future research. The study also didn’t account for disturbances like wildfires or insect-driven tree mortality.

CMCC’s role in this study was to take on the natural capital aggregates and impact functions into its climate-economic model RICE50+, which has a highly regional detail, and where CMCC scientists extended the macroeconomic production function to include natural capital and feedback from the climate system (“Green RICE50+” model).

Accounting for nature

The overall findings underscore the importance of creating climate policies that account for the particular values each country derives from its natural systems.

“With this study, we’re embedding natural systems and human well-being within an economic framework,” said senior author Frances C. Moore, an associate professor in the UC Davis Department of Environmental Science and Policy. “Our economy and well-being depend on these systems, and we should recognize and account for these overlooked damages when we consider the cost of a changing climate.”

“The loss in biodiversity and natural habitats over past decades is well documented” explains Johannes Emmerling, Senior Scientist at RFF-CMCC European Institute on Economics and the Environment (EIEE) and among the authors of the study. “And indeed it is important also for the functioning of our economy. By integrating both market and non-market services, and both private and public goods in an economic model, we are able to quantify the potential macroeconomic impacts of such losses”. “However, we are also already at the beginning of understanding the economic role of natural capital and biodiversity,” he added.

“Integrating ecosystems services within a detailed climate-economy model allowed us to have a richer perspective on the distributional consequences of climate impacts” continues Francesco Granella, Post-Doctoral Researcher at RFF-CMCC European Institute on Economics and the Environment (EIEE) and also among the authors of the study, “and the results underscore the collective dimension of the challenges coming from biodiversity loss and climate change”.

“Biodiversity and climate change are intertwined crises,” says Massimo Tavoni, director of the RFF-CMCC European Institute on Economics and the Environment (EIEE). “This study shows that acting on both is not just in the interest of the planet but also for all of us.”