The research combines global economic models with ecosystem benefit models
WEST LAFAYETTE, Ind. – Current trends in environmental degradation will result in major economic losses over the coming decades, with the poorest countries hit hardest, according to a new study from Purdue University and the University of Minnesota. The study also concludes that investing in nature can turn these losses into gains.
The results, published in Proceedings of the National Academy of Sciences, develop a novel global Earth economic model to capture economic-environment interactions. Chief among these interactions are how nature benefits humans by pollinating crops, providing wood, storing carbon and providing catches for marine fisheries, and how these benefits impact the economy at large.
“Traditional economic models almost completely neglect the fact that the economy relies on nature,” said study co-author Thomas Hertel, distinguished professor of agricultural economics at Purdue University. “This new study required a detailed understanding of how and where land-use patterns are changing due to economic activities, with enough spatial detail to understand the environmental consequences of these changes.”
The study was led by Justin Johnson of the University of Minnesota. Co-authors include Hertel and Uris Lantz Baldos of Purdue And Erwin Corong, both from the Center for Global Trade Analysis, and Steve Polasky, co-lead of Global to Local Analysis of Systems Sustainability (GLASSNET), and other collaborators at the University of Minnesota, the World Bank, and Canada’s University of Victoria.
In order to arrive at their results, the researchers combined several models. One of these was Purdue’s Global Trade Analysis Project (GT`) model, which performs quantitative analysis on a wide range of interrelated international economic issues.
The other model series, called “Integrated Valuation of Ecosystem Services and Tradeoffs” (InVEST), was developed in Stanford University’s Natural Capital Project. GT` and InVEST are widely used by policy makers, non-governmental organizations and the private sector around the world.
Insect pollination is one of many economic services provided by nature. This world map shows the impact of pollination on crop yield. The pollination effect is highest in the blue and green areas and lowest in the red and orange areas. (Image provided by Sumil Thakrar, University of Minnesota) Download image
“We’ve long assumed that the economy and the environment work against each other,” said the study’s lead author Johnson, an assistant professor of applied economics at the University of Minnesota. “Investing in nature doesn’t mean stalling the economy; it boosts the economy. But until recently it was difficult to model these interactions.”
Hertel founded GT` 30 years ago. GT` has since grown into a global network of 26,000 members contributing data and expertise from 160 countries and regions. Purdue’s GT` economists compile the data and connect it to various modeling frameworks. Economic flows are divided into 65 sectors: 20 in agriculture and food, 25 in manufacturing and 20 in services.
“The database now covers 98% of global gross domestic product in great detail,” said Hertel. And the database links agriculture and many other aspects of the national and global economy. “It’s important for the kind of study we have here,” he said.
The integrated GT`-InVEST model builds on similar policy-related work published by the World Wildlife Fund in 2020 and the World Bank in 2021.
“We hope to make this type of analysis a standard tool in a policymaker’s toolbox,” Johnson said.
The new study examined policy options for investing in nature, including removing farm subsidies, funding research to improve crop yields, and international payments from wealthy countries to poorer countries to support conservation. The policies resulted in annual gains of $100 million to $350 million in 2014. The largest GDP percentage increases were in low-income countries.
On the other hand, sustained trends in environmental degradation would result in losses of US$75 billion per year. This included low-income countries, which suffered a 0.2% drop in GDP each year. These results highlight that public goods and services provided by the environment are often most important to the world’s poorest, who have less access to alternative options in a deteriorating environment. Investing in nature thus tends to help make the world a fairer place, say the researchers.
Funded by Purdue, the University of Minnesota and the National Science Foundation, the study illustrates what the two universities hope to achieve with their GLASSNET project. Based in Purdue, GLASSNET is an international network of networks dedicated to sustainability analysis.
“One theme behind GLASSNET is the idea of global to local to global,” Hertel said. “It’s about connecting the global with the local, because ultimately all sustainability issues are very local.”
If, for example, pollinating insects can no longer reach the crops in certain areas, yields are reduced. This in turn reduces profits and shows the connection between nature and the economy, said Hertel.
The new research looked at only a small part of the way the economy and environment interact, but still found strikingly large impacts. Hertel and his colleagues assume that an entire field of research will develop in this direction.
“We want to expand the GLASSNET coverage of ecosystem services,” he said. “There are many important services provided by nature that are not quantified here – groundwater, for example. Its a lot to do.”
Writer: Steve Cope
Media contact: Maureen Way, [email protected]
Sources: Tom Hertel, [email protected]; Justin Johnson, [email protected].
Agricultural communication: 765-494-8415;
Maureen Manier, Division Manager, [email protected]
farming news site
Comments are closed.