Experts have issued a stark warning that the ongoing destruction of nature could precipitate an economic downturn in Britain more severe than those triggered by the 2008 global financial crisis or the Covid pandemic.
According to a report by the Green Finance Institute, if the current rate of environmental degradation continues, the UK could see a 12% loss in gross domestic product (GDP) by the 2030s.
The report, which draws on insights from academia and government, emphasises that gradual environmental degradation could prove as harmful, if not more so, than climate change. This degradation includes pollution, damage to water systems, soil erosion, and increased disease threats.
Notably, the financial crisis of 2008 resulted in a 5% reduction in UK GDP, while the Covid pandemic led to an 11% GDP contraction in 2020. The projected 12% GDP loss due to environmental decline starkly highlights the severe economic implications of failing to protect natural habitats.
The comprehensive study presents three scenarios reflecting the risks of ongoing environmental breakdown: domestic risks within the UK, international risks involving key trading partners, and a health scenario that assesses the potential impact of a new global pandemic. Each scenario projects significant economic losses, with environmental factors alone poised to cause a GDP reduction of up to 3%, or approximately £70 billion, by the late 2020s.
Furthermore, the report introduces “acute risks” such as floods, droughts, and wildfires, which could lead to a 6% GDP loss in the domestic and international scenarios and a 12% decrease under the health scenario. This highlights the extreme dangers posed to the UK economy by potential new pandemics and other sudden environmental crises.
UK government ministers, alarmed by the findings, are taking the report seriously. Environment Minister Richard Benyon emphasised that the health of the economy is deeply intertwined with the condition of nature, which is currently under significant threat.
Benyon, whose family controls a 5,600-hectare (14,000-acre) estate in west Berkshire, southern England, said the responsibility to conserve nature “lies with all sectors and sections of society, and green finance has a crucial role to play”.
He said: “The findings in this report will help people and institutions across the corporate and finance sectors understand that it is in their own interests to go further and faster for the planet to protect it for future generations.”
The opposition has also voiced concerns, with Shadow Environment Secretary Steve Reed criticising the government’s role in making the UK one of the most nature-depleted countries globally.
Saying that the UK needed “to reverse the tide of destruction”, Reed committed Labour to cleaner air and water “and growing nature-rich habitats for wildlife to thrive”.
The Green Finance Institute, which describes itself as a leading forum for green finance innovation in the UK and Europe, collaborates with banks, academics, philanthropists, and government bodies to develop eco-friendly policies and financial products.
The report warns that UK banks might need to decrease their exposure to industries most affected by nature loss or face increased risks from non-performing loans. Notably, about 50% of the projected additional costs are expected to stem from the loss of overseas nature upon which the UK relies for food, natural resources, and trade.
The report said: “The impacts of biodiversity loss and environmental degradation will not be felt alone but will compound with climate risks. Both are happening at once and there are strong feedback effects between the loss of natural capital and climate change.”
Supported by the government and with contributions from various prestigious institutions, the report builds on a Treasury-backed review by economist Sir Partha Dasgupta in 2021, which highlighted the extreme risks posed by the global economic system’s failure to account for the rapid depletion of the natural world.
Last year, the government agency Natural England launched its Nature Returns programme to coordinate efforts across government and the private sector to explore how the UK can best use land in England “to address climate change whilst producing food and promoting thriving nature”.
The agency said it wanted “to mobilise the billions in private investment that government estimates we need to meet our national net zero commitments”.
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At Natural World Fund, we are passionate about stopping the decline in our wildlife.
The decline in our wildlife is shocking and frightening. Without much more support, many of the animals we know and love will continue in their decline towards extinction.
When you help to restore a patch of degraded land through rewilding to forests, meadows, or wetlands, you have a massive impact on the biodiversity at a local level. You give animals a home and food that they otherwise would not have had, and it has a positive snowball effect on the food chain.
We are convinced that this is much better for the UK than growing lots of fast-growing coniferous trees, solely to remove carbon, that don’t actually help our animals to thrive.
This is why we stand for restoring nature in the UK through responsible rewilding. For us, it is the right thing to do. Let’s do what’s right for nature!
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