Nature Loss Tied to Economic Collapse

2–3 minutes

Fact is, human existence from health and economics is completely tied to the health of the natural environment. And for a long time, humans have disrespected and taken for granted our natural world and the biodiversity as something outside of ourselves to have and abuse. However, in a the first biodiversity-adjusted sovereign credit rating study from a team of British universities show that even partial ecological collapse would cause economic damage and risk many countries for bankruptcy.

So much of our economy depends on our natural world. For instance, even partial collapse of fisheries, timber production, and wild pollinators would lead more than 26 of the countries studied would face credit rating downgrades based on World Bank AI simulations leading with India dropping 4 notches and China dropping by 6 notches in a 20-notch scale.

Under the current status quo of business as usual, by 2030, China and Indonesia will drop at least 2 notches by 2030. Across the 26 countries, the increase of annual interest payment on debt would be as high US$53 million dollars per year, with developing nations most at risk for debt defaults and bankruptcy. The found that almost a third of the countries analyzed would expect more than three notch drop including India, Bangladesh, Indonesia, and Ethiopia each at 4 notch drops.

The authors also note that their simulation show a conservative estimate as the simulation only accounted for fisheries, timber, and pollinators. In truth, nature degradation covers everything from health to food production with the consequences from biodiversity loss to be extremely hard to quantify.

“It is not just the financiers that lose out,” said lead author Dr Matthew Agarwala. “Increased sovereign risk sees markets demand higher risk premia, meaning governments – and ultimately, tax payers – pay more to borrow.

“As nature loss reduces economic performance, it will become harder for countries to service their debt, straining government budgets and forcing them to raise taxes, cut spending, or increase inflation. This will have grim consequences for ordinary people.”

Fact, only idiots think that financial gains outweigh environmental protection because everything arises out of the environment and thus should be the number one priority of every single person and government for a sustainable future.