The quantified case for protecting the natural world

Much of the global economy depends on nature. Natural areas protect our communities against major storms, floods, fires, and desertification. They help mitigate climate change by absorbing carbon dioxide and directly support economic activities as wide-ranging as agriculture, ecotourism, and pharmaceutical innovation. Yet the complexity of the world’s stock of natural assets makes these benefits hard to quantify, leading many to overlook nature as an investment opportunity. As a result, we’re woefully behind in our global efforts to protect nature.

Conservation will always include difficult tradeoffs, but better methodologies to assess the value of conservation will improve resource allocation when decision makers face those tradeoffs. That’s why this week, we’re publishing a new report called Valuing Nature Conservation, in which we bring together geospatial methodologies and data sets to quantify the benefits of nature conservation in detail.

As an anchor for our analysis, we use a global target proposed by the UN Convention on Biological Diversity: to protect 30 percent of the planet by 2030. But because tradeoffs are made at a local level, we used highly detailed, 5x5km geospatial analytics and assessed around 35,000 data layers in a six-million-pixel image of Earth. We developed six different scenarios to get to that 30 percent protected mark, each of which differed in the way they weighed opportunity costs or the interpretation of the 30 percent target as a national or regional target.

Valuing nature conservation

Valuing nature conservation

Here’s what we found. Protecting 30 percent of the planet could reduce atmospheric carbon dioxide by 0.9 to 2.6 gigatons annually, through both avoided deforestation and natural regrowth. As we discussed in our recent article Climate math: What a 1.5-degree pathway would take, this range equals four to 12 percent of the annual CO2 emissions reductions needed by 2030 to limit global warming to 1.5°C. Conserving 30 percent of the planet would also create between 400,000 and 650,000 jobs in nature conservation itself and create or protect another 30 million jobs in two nature-dependent marketsecotourism and sustainable fishingsafeguarding a total of $300 to $500 billion in annual GDP.

Not only that, but conservation may play a role in preventing the next pandemic. The areas our scenarios prioritize for conservation have a 10 to 80 percent higher concentration of the risk of zoonotic disease transmission than areas not prioritized in our scenarios. If we protect these areas, we may help contain ecosystem fragmentation and practices that can transmit diseases to human populations.

Perhaps most importantly, we find that achieving 30 percent conservation could have a significant impact on the very biodiversity that underpins these benefits. It would, for example, expand the protected habitat of species threatened with extinction by on average 2.2 to 2.8 times. That means more space for snow leopards, Philippine eagles, and giant ant eaters, along with a million other threatened species.

Meanwhile, on the costs side, we project that the additional operating expenditure of expanded conservation would be $20 billion to $45 billion a year.

Those are some of the global conclusions. Locally, we see a compelling business case emerging. We find that for over half the areas that we assessed, the GDP benefit created by ecotourism and sustainable fishing alone could outsize the operational costs of conservation by more than three times.

We need to compile the natural business case at the decision maker level: province by province, reef by reef, forest by forest.

Duko Hopman and Robert Wilson, McKinsey

We realize that this is only the tip of the business-case iceberg. There are countless downstream benefits of conservation that we were unable to quantify at a six-million-pixel scale, many of them related to climate change mitigation. For example, in our report Climate risk and response, we find that without a change of course, by 2030, between 160 million and 200 million people could live in regions with an average five percent annual probability of experiencing a heat wave that exceeds the survivability threshold for a healthy human being.

Taking this forward, we need to compile the natural business case at the decision maker level: province by province, reef by reef, forest by forest.

Our new report attempts to contribute to the methodology that would make this possible. What’s needed next is the collaboration of public and private stakeholders, conservation donors, practitioners, and scientists in alliances that can pool resources and expertise. These alliances, in our view, would work closely with government but also pull in private sector partners and their experience in areas like project financing and risk modelling.

Such alliances have been very successful in public health, but largely absent in the conservation space. Our recommendations in the report include questions that conservation stakeholders can explore as they work together better to compile the natural business casepixel by pixel, kilometer by kilometerinforming a more optimal allocation of economic resources to conservation. We hope that our insights and methodology will help inform critical conversations and decisions made by the global conservation community.

McKinsey partner Kimberly Henderson and associate partner Julien Claes contributed research and insights for this article.

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