Investing in nature can improve equity and economic returns

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 localto-global, and globalto-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 benefits to inhabitants of the poorest countries.

Automated summary

Sustainable development requires achieving both economic development for better standard of living and environmental sustainability. This study developed an integrated model that combines the economy's general equilibrium model and fine-scale, spatially explicit ecosystem services. The analysis shows that investing in nature can lead to significant improvements in economic prosperity, especially in the lowest-income countries.