Investing in nature can improve equity and economic returns
Justin Andrew Johnson (),
Uris Lantz Baldos,
Erwin Corong,
Thomas Hertel,
Stephen Polasky (),
Raffaello Cervigni,
Toby Roxburgh,
Giovanni Ruta,
Colette Salemi and
Sumil Thakrar
Additional contact information
Justin Andrew Johnson: a Department of Applied Economics, University of Minnesota , St. Paul , MN 55108
Uris Lantz Baldos: b Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University , West Lafayette , IN 47907-2056
Erwin Corong: b Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University , West Lafayette , IN 47907-2056
Stephen Polasky: a Department of Applied Economics, University of Minnesota , St. Paul , MN 55108
Raffaello Cervigni: c Global Program on Sustainability, The World Bank , Washington DC 20006
Toby Roxburgh: d Independent Consultant , Bristol BS7 8E , United Kingdom
Giovanni Ruta: c Global Program on Sustainability, The World Bank , Washington DC 20006
Sumil Thakrar: a Department of Applied Economics, University of Minnesota , St. Paul , MN 55108
Proceedings of the National Academy of Sciences, 2023, vol. 120, issue 27, e2220401120
Abstract:
Sustainable development requires jointly achieving economic development to raise standards of living and environmental sustainability to secure these gains for the long run. Here, we develop a local-to-global, and global-to-local, earth-economy model that integrates the Global Trade Analysis Project (GTAP)-computable general equilibrium model of the economy with the Integrated Valuation of Ecosystem Services and Tradeoffs (InVEST) model of fine-scale, spatially explicit ecosystem services. The integrated model, GTAP–InVEST, jointly determines land use, environmental conditions, ecosystem services, market prices, supply and demand across economic sectors, trade across regions, and aggregate performance metrics like GDP. We use the integrated model to analyze the contribution of investing in nature for economic prosperity, accounting for the impact of four important ecosystem services (pollination, timber provision, marine fisheries, and carbon sequestration). We show that investments in nature result in large improvements relative to a business-as-usual path, accruing annual gains of $100 to $350 billion (2014 USD) with the largest percentage gains in the lowest-income countries. Our estimates include only a small subset of ecosystem services and could be far higher with inclusion of more ecosystem services, incorporation of ecological tipping points, and reduction in substitutability that limits economic adjustments to declines in natural capital. Our analysis highlights the need for improved environmental–economic modeling and the vital importance of integrating environmental information firmly into economic analysis and policy. The benefits of doing so are potentially very large, with the greatest percentage benefits accruing to inhabitants of the poorest countries.
Keywords: ecosystem services; economics; computable general equilibrium; sustainable development; climate change (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:nas:journl:v:120:y:2023:p:e2220401120
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