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Copenhagen Consensus Center

Third Copenhagen Consensus: Biodiversity Assessment, Hussain Markandya et al

Assessment Paper

An Assessment Paper on Biodiversity has been written by S. S. Hussain , A. Markandya, L. Brander, McVittie A, de Groot , Vardakoulias O, A. Wagtendonk and P. Verburg and released by the Copenhagen Consensus Center. The working paper used by the Expert Panel is available for download here, the finalized paper has been published in Global Problems, Smart Solutions - Costs and Benefits by Cambridge University Press.

In addition two Perspective Papers have been released, one by John Whitehead and Paul Chambers, as well as one by Juha Siikamäki.


Short summary

Salman Hussain and Anil Markandya note that there will be a significant loss of biodiversity over the next 40 years. They estimate that globally this loss could be around 12 percent, with South Asia facing a loss of around 30 percent and Sub-Saharan Africa of 18 percent.

These losses have a significant value, because of the ‘ecosystem services’ that humans obtain from nature. The value of these services has been estimated in monetary terms in a number of studies for temperate and tropical forests and grasslands. From this analysis, Hussain and Markandya derive figures for the losses that will occur when any patch of the same sort of natural area is lost.

The study looks at three interventions and compared these to doing nothing – ‘business as usual’. The first solution focuses on creating an increase in agricultural productivity through research and development. This may seem like a roundabout way to address biodiversity, but as the global population has increased to 7 billion, we have cut down more and more forest to grow our food. Likewise, looking towards 2050 we will likely expand agricultural area another 10 percent, which will come from natural areas like forests and grasslands. Thus, if we could increase agricultural productivity we would need to appropriate less and be able to leave more to nature.

The authors estimate that with a $14.5 billion annual infusion into research we can achieve 20 percent higher annual growth rates for crops and 40 percent higher growth rates for livestock, which over the next 40 years will significantly reduce pressures on nature and hence help biodiversity.

Just when looking at tropical forests, this will avoid us cutting down the equivalent of an area of Spain, and a similar avoided area of temperate forests and we will save more than twice that area of grasslands. In total, the benefits will be on the order of $53 billion. When we then also take into account that these forests will store more carbon of almost the same benefit, the benefit-cost ratio is likely to be around 7 – so for every dollar spent, we will do about 7 dollars worth of good both for biodiversity and climate.

Beyond that, we will of course also have made more food available and at cheaper prices for future generations, which likely mean that the total benefit-cost is substantially higher again

The second program they explore is increasing the amount of protected areas globally to around 20 percent of all land across a large number of ecological regions, over three decades. Currently such areas account for around 10 percent of all land. There are obvious benefits from this but there are also significant costs, principally the loss of output from the land that is taken out of use. While the expansion of protected areas can severely limit potential agricultural expansion in the context of the baseline projection of rising food demand, land scarcity arising from such a policy would likely force an increase in agricultural productivity. The net benefits are very much dependent on what cost estimates are used for newly protected lands. With higher assumptions about costs, the program does not pass a benefit-cost test: in other words, it costs more than the benefits. This is even when the benefits of avoided climate change are included. With lower assumptions it only barely passes, making one dollar achieve slightly more than a dollar worth of good in biodiversity and climate.

However, Hussain and Markandya note that the main reason for this program would be to enhance biodiversity conservation and our methods of estimation do not fully capture those benefits, so these estimates could be an underestimation.

The final program they looked at is one that seeks to prevent all dense forests from being converted to agriculture over a thirty year period, because forests are one of the main homes to biodiversity. Notice, that the academics do not attempt to assess the political viability of such an approach, but it would save more than five Spains worth of tropical forests.

In this case the benefits are very high. There is considerable uncertainty about the costs (the upper estimate is more than four times the lower estimate) but since forests lands are mostly valuable because they can be converted to agriculture and since the prices are higher because of ineffective agricultural subsidies, they find the most reasonable estimates for forests are not the highest. With these estimates, the benefits exceed the costs even without including the CO2 storage value, and solution is very attractive at a minimal $7 back on the dollar.