The value of Earth’s natural infrastructure falls to $33 quadrillion, says environmental study

Humans cause $5 quadrillion in damage to planet, mostly through continued deforestation and atmospheric pollution

San Diego, UNITED STATES


SAN DIEGO, May 06, 2021 (GLOBE NEWSWIRE) -- A new study estimates the value of Earth’s natural infrastructure such as the atmosphere, forests, wetlands, and oceans has fallen in value to $33 quadrillion – after factoring humankind’s $5 quadrillion in damage.

The analysis, completed by Environmental Business International (EBI) and originally published in the fall 2020 edition of Climate Change Business Journal (CCBJ), estimates the economic value of Earth, without humans, equals $38 quadrillion dollars. One quadrillion is equivalent to 1,000 trillion.

The Earth’s atmosphere has lost an estimated $1.2 quadrillion in economic value of its pre-human value of $12 quadrillion, while forests and wetlands have lost an estimated 42% and 45% of their value, respectively.

The EBI team, led by Grant Ferrier, founder of environmental industry research firm EBI and editor of the Environmental Business Journal since 1988, compiled and tabulated estimates from numerous studies, scholarly journals and scientific reviews and concluded that the earth’s atmosphere and forests have suffered the most loss in economic value since the beginning of human civilization.

Click here to read CCBJ’s summary of the study.

“By acknowledging the finite value of Earth and its resources and ecosystems — or its ‘natural capital’ or ‘natural infrastructure’ — we can show the validity of implementing economic instruments such as pollution taxes or resource extraction fees to start to account for the overall value of our planet,” Ferrier said.

“Conversely, economic models should increasingly assign credits to the positive impacts generated by effective management of our natural infrastructure to help preserve, enhance, restore or even create greater value,” Ferrier said. “We regularly measure a country’s gross domestic product, but even attempts at regular reporting of a green GDP fail to include the rise and fall of natural infrastructure or the amount needed to protect or restore depleted natural resource assets.”

EBI Model of the Economic Value of Natural Infrastructure ($Trillions)

Natural AssetPre-Human2020Loss
Atmosphere 12,00010,8001,200
Hydrosphere
Oceans4,0003,600400
Ice Caps (cryosphere)600400200
Lakes & Rivers2,2001,600600
Hydrologic Cycle2,6002,500100
Other2,0001,800200
Biosphere
Forests2,4001,4001,000
Wetlands400220180
Biodiversity6,0005,200800
Other2,0001,400600
Lithosphere 4,0003,900100
Total 38,200 32,820 5,380

Source: Environmental Business International Inc. Estimates are derived from a compilation of estimates and opinions of multiple sources of NGO, think-tank and academic papers on each line item, as well as published papers on natural capital and ecosystem services, and interviews and email communications with analysts, researchers and published environmental economists.

Natural resource valuation modeling is similar to how insurance industries and their actuarial analysts apply economic values to measure or predict monetary damages from contamination, pollution, major weather events, climate risks and other ecosystem impacts.

For example, the American Forest Association estimates the annual economic value of a tree at approximately $500 in today’s dollars. This value takes into account a tree’s contribution to air quality, erosion control, shelter and temperature modulation. With approximately 3 trillion trees on Earth, forests represent $1.5 quadrillion in economic value. In comparison, before the advent of agriculture more than 10,000 years ago – and more recently the timber industry – scientists estimate the earth had twice as many trees as it does now.

“This study serves as an alarming reminder to governments, businesses and citizens that every tree we cut down, every mountain of minerals we remove and every contaminant we place in the atmosphere has an incremental negative economic impact on Earth,” said Ferrier. “The human impact on our atmosphere, oceans, forests, lakes and rivers, and wetlands should be accounted for in our economic system to create more sustainable environmental and economic policies that need to increasingly be integrated into an economic system that values the environment rather than freely allows its exploitation,” said Ferrier.

Ferrier acknowledges the inexact nature of EBI’s current estimates in the ‘meta-study’ and acknowledges the work of environmental economic pioneers like Stern, Costanza and others that have provided estimates of the economic value of natural capital or ecosystems services. “Environmental economics is by no means a new field, but I believe its conclusions have not yet been influential enough to shape policy, investment and the plight of our natural infrastructure,” Ferrier said.

A companion study estimates the economic value of human-made infrastructure such as railroads, paved roadways, buildings, dams, natural gas pipelines, electric cables, etc., measures into the quadrillions of dollars. However, this is far less than the value of the earth’s total natural infrastructure. By comparison, the world’s 193 economies contribute about $100 trillion in gross world product measured in traditional economic terms.

“This study points out that repairing one more mile of pavement or adding one more mile of interstate is less consequential to sustaining human quality of life on Earth than restoring or sustaining one more hectare of wetlands, native forests, coral reef, desert or arctic habitat,” Ferrier said. “Mankind and nature can indeed exist in harmony. We just need an economic system that incorporates this basic premise. Acknowledging the incremental economic impact of unsustainable behavior is the first step to preventing the continued degradation of our natural infrastructure.”

About Environmental Business International
Environmental Business International Inc. (EBI) is an independent, private research and publishing company that generates strategic market intelligence in the Environmental Industry and the Climate Change Industry. With 33 years of environmental market research and analysis in all key industry segments, EBI provides proprietary information for executives, investors, analysts, policymakers and management consulting firms in the form of business journals, executive events, research reports, and statistical datasets. Visit www.EBIonline.org.

Press contact: Marc Lumpkin, Altitude Public Relations, marc@altitudepr.com