Recognising the essential services provided by natural capital, a new report by The World Bank demonstrates significant opportunities for using valuable natural resources more efficiently.
Nature’s Frontiers: Achieving Sustainability, Efficiency, and Prosperity with Natural Capital puts forward a methodology combining innovative science, new data sources, and cutting-edge biophysical and economic models to build sustainable resource 'efficiency frontiers' to assess how countries can sustainably use their natural capital in more efficient ways to achieve their economic and environmental goals.
The report, a collaboration by The World Bank and Natural Capital Project indicates that significant efficiency gaps exist in nearly every country in the world. Closing these gaps can address many of the world’s pressing economic and environmental problems—economic productivity, health, food and water security, and climate change. The efficiency frontier approach taken is flexible and can be used to measure outcomes across a virtually unlimited number of dimensions. This report applies this approach to two of the most significant natural capital assets—land and (clean) air.
A summary of the key results:
• Significant efficiency gaps exist in the use of land in countries at all income levels and in all regions. On average, countries can almost double their performance in terms of either economic returns or environmental outcomes by improving on one dimension without a sacrifice in the other outcome.
• More efficient use of land could sequester an additional 85.6 billion metric tons of carbon dioxide equivalent with no adverse economic impacts. Because most tropical low-income countries have a comparative advantage in sequestering carbon through forests, they gain significantly more than any other group of countries from policies that reward land-based GHG sequestration initiatives.
• Better allocation and management of land, water, and other inputs could lead to increases in agriculture, grazing, and forestry annual income by approximately US$329 billion—and enough food production increases to feed the world until 2050—without net loss of forests and natural habitats. Better cultivation strategies that close yield gaps, along with smarter spatial planning, can reduce the land footprint of agriculture while increasing global calories produced by more than 150 per cent.
• Existing policies for reducing air pollution and the resulting mortality could be achieved with a 60 per cent cost saving. The 63 countries examined for air quality spent a total of US$220 billion—0.6 percent of their collective gross domestic product—on air pollution controls per year. These expenditures prevented 1.9 million premature deaths per year. If more economically efficient policies were adopted, the same results could be achieved at an even lower cost—only US$75 billion, or less than US$40,000 per life saved.
• More efficient air pollution policies could have saved significantly more lives with the same level of spending. Had countries spent the same amount of money to abate particulate matter but implemented the most efficient policies instead of the abatement policies they actually implemented, they would have prevented an additional 366,000 premature deaths each year—a 20 per cent improvement over the current level.
No one-size-fits-all solution exists, given the differences in needs and capacities among countries. This report identifies what changes are required and where, and develops a policy filter for choosing the most appropriate policy mix for the country. The result is a roadmap that can assist in the selection of approaches that are most feasible and affordable in each country. It also drills down into specific examples of priority reforms to illustrate how to put these tools into action.
Given countries’ competing needs and stretched budgets, tackling inefficiencies remains among the more cost-effective and economically attractive ways to achieve global sustainability goals. As global populations expand and the climate changes, pressures on natural resources will inevitably escalate, and economic consequences will worsen.
"Although the approach outlined in the report will entail demanding policy reforms, the costs of inaction will be far higher."
Read the report HERE.
The authors will present more info on the project at this webinar on June 30, 2023.