The EU economy’s dependency on nature

Dominik Hirschbuehl (), Aude Neuville (), Marco Petracco Giudici () and Irene Sanchez Arjona ()
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Dominik Hirschbuehl: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Aude Neuville: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Marco Petracco Giudici: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en
Irene Sanchez Arjona: European Commission - JRC, https://joint-research-centre.ec.europa.eu/index_en

No 2025-04, JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission

Abstract: While the importance of nature for economic production is undisputed, nature’s contribution is still underrepresented in economic modelling. Following previous studies, this work produces a “high-level” estimate of the dependencies of all EU economic sectors on ecosystem services by applying the ENCORE (Exploring Natural Capital Opportunities, Risks and Exposure) framework to an input-output model. Depending on the version of ENCORE used and on some other assumptions, between 19% and 36% of the EU economy’s gross value added (GVA) is found to be highly dependent on ecosystem services. International extensions of the analysis show that the economies of EU and China appear to be more dependent on nature than that of the United States. The analysis also reveals that the entire economy is vulnerable to nature degradation, as all sectors are interlinked through supply and customer connections, potentially leading to cascading effects along value chains.

Keywords: Natural capital; nature degradation (search for similar items in EconPapers)
JEL-codes: C67 Q5 Q57 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2025-02
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