Nature Is An Economic Winner for COVID-19 Recovery
This commentary was produced by the World Resources Institute, as a managing partner of the Global Commission on Adaptation.
No matter where you are, your country’s leaders are figuring out how to rebuild from the economic and social shocks brought on by the COVID-19 pandemic. Imagine if those leaders used this moment to pivot away from the resource-hungry economic model that drove last century’s growth toward a more resilient approach that works with nature rather than against it. Imagine if your government proposed a stimulus package that included significant investments in protecting and restoring ecosystems that underpin your economy along with low-carbon, climate-resilient approaches to energy, construction, and transport.
This is not “pie in the sky,” as you might think. It is exactly what the European Commission has proposed as the basis for a €750 billion “European Green Deal.” The package would include major investments in protecting and restoring forests, soils, wetlands, and rivers as well as transforming agricultural practices to make them more sustainable. Europe's “Green Deal” is far from a done deal; a political process is just beginning during which vested interests will undoubtedly push to water it down. But it is an example of the kind of longer-term, visionary thinking that is critically needed at this moment. As countries look to build back better after the coronavirus pandemic, investments in protecting and restoring nature can deliver significant economic returns and employment benefits at a time when both are urgently needed.
An Unprecedented Global Economic Challenge
The COVID-19 pandemic has already had significant negative impacts on economic well-being around the world. Alongside the grim toll of lives lost and upended by the pandemic, unemployment has spiked, economic growth forecasts have been revised downward, and supply chains have been disrupted. The pandemic has led to a major crisis for the global economy and for individual countries struggling to sustain growth or continue progress on their development trajectories.
As countries focus on addressing the wrenching effects of the coronavirus pandemic, other global priorities remain critically important. We are still on track for at least 2o Celsius of global warming, and the various effects of climate change are already with us — from rising temperatures to more frequent and intense storms and droughts. More than one million species are threatened with extinction. Emerging evidence links the transmission of zoonotic diseases, like COVID-19, to deforestation and land degradation.
Countries are responding to the economic impacts of COVID-19 by allocating trillions of dollars to fiscal stimulus packages and beginning to develop longer-term economic recovery programs. According to the International Monetary Fund, about US$9 trillion in fiscal support had been announced as of May 2020. The United States has agreed to a series of economic stimulus packages worth more than $3 trillion; Japan has committed more than $2 trillion. Yet preliminary analysis shows that few of these stimulus responses can be described as “green.” Indeed, many initial responses are more likely to contribute to further environmental and climate problems (see figure below).
Economic responses to the COVID-19 crisis must embrace the notion of “building back better” — providing jobs and generating economic growth in ways that protect and restore the natural systems on which economies depend, accelerate the transition to low-carbon economies, and make us more resilient to the impacts of climate change. The good news: low-carbon and climate-resilient investments deliver far higher economic returns than investments in traditional infrastructure and fossil fuels.
At a minimum, policymakers should ensure that short-term economic recovery plans do not accelerate deforestation and biodiversity loss, increase carbon emissions, leave humanity more vulnerable to climate impacts, and ultimately worsen the risk of wildlife-to-human disease transmission of the kind that led to the current coronavirus pandemic. But there is also a chance to shift significantly away from the status quo. As United Nations Secretary-General António Guterres has said, “We have a responsibility to recover better” than after the 2008 global financial crisis.
How Can Nature Help Build Back Better?
Nature underpins economies and society on many levels. Ecosystem services worldwide are worth an estimated $125 trillion annually, and they support industries (like farming, fishing, forestry, and tourism) that employ 1.2 billion people. A recent World Economic Forum report estimates that more than half of the world’s GDP is moderately or highly dependent on nature and its services. About 1.6 billion people rely directly on the world’s forests for food, income, and livelihoods. Healthy ecosystems also enhance humanity’s resilience to future shocks by strengthening food security, protecting us from climate impacts, mitigating climate change, and improving our health.
Nature-based solutions (NbS) are defined as “actions to protect, sustainably manage and restore natural or modified ecosystems that address societal challenges effectively and adaptively, simultaneously providing human well-being and biodiversity benefits.” These can include:
- Protecting, managing, and restoring forests
- Adopting “regenerative” approaches to agriculture
- Building artificial wetlands within cities to reduce flooding
- Managing watersheds to provide clean water
- Restoring mangroves to mitigate storm damage
Nature-based solutions are a smart investment now more than ever (see figure below). According to the Global Commission on Adaptation, they are typically cost-effective and offer a triple dividend of benefits:
- Economic gains, from immediate jobs restoring and protecting nature, to long-term economic growth associated with increasing food and water security, business productivity, and tourism and recreation value.
- Avoided losses from protecting communities and infrastructure from floods, storms, and heatwaves, saving many countries billions of dollars each year.
- Social and environmental benefits, from cleaner air that improves human health and mitigates climate change, to more habitat for endangered species.
This triple dividend is precisely why nature-based solutions should play an important role in COVID-19 economic recovery packages.
Countries and Cities Are Already Showing the Way
Some countries are already showing how to put nature at the center of their approach to COVID-19-related economic stimulus and recovery. Germany included €700 million to support forest conservation and management in the package that it announced in early June. New Zealand has announced a $1.1 billion program that aims to create 11,000 jobs through major investments in restoring wetlands and riverbanks, removing invasive species, and improving tourism and recreation services on public lands. As New Zealand’s Conservation Minister Eugenie Sage put it, “this investment in nature will not only support thousands of people with jobs but pay dividends for generations to come by giving nature a helping hand.” While New Zealand’s program does not adequately tackle climate change, it shows how nature can be a critical element of a job-focused COVID-19 recovery strategy.
There are other good historical examples of building nature into economic recovery packages. South Korea invested a significant percentage of its stimulus package into forest and river restoration following the 2008 financial crisis. The American Recovery and Reinvestment Act of 2009 (ARRA) included $167 million to restore coastal habitat, creating an average of 17 jobs per million dollars spent — this was much higher than traditional industries such as coal, gas, and nuclear energy generation. And during an earlier global economic crisis, the Great Depression, the US government set up a Civilian Conservation Corps, which employed about three million people. The Corps spearheaded the planting of more than three billion trees, the building of flood barriers, and the construction of recreational facilities in more than 800 parks nationwide.
City and local governments have already been investing in nature-based solutions as a part of their own recovery efforts in response to the coronavirus pandemic. As office closures and social distancing requirements have increased the demand for urban green space, including walking and cycling infrastructure, cities like Bogotá and Paris are planning major upgrades to their systems. Jakarta and Mexico City are investing in massive tree planting campaigns in an effort to improve poor air quality, which studies have shown is linked to higher death rates from COVID-19. And cities and states in the Western United States are investing heavily in forest restoration for jobs and to reduce the risk of catastrophic wildfires, which threaten to overwhelm emergency response resources.
Nature-based Solutions Are an Economic Winner
The International Labour Organization estimates that 1.25 billion workers (more than one-third of the global labor force) are vulnerable to employment impacts from the COVID-19 pandemic. While impacts vary across countries and sectors, unemployment has already soared in developed and developing countries alike.
Investments in nature-based solutions can help. They typically create low-skill and fast-implementing jobs — on average, between 7 and 40 jobs per $1 million invested. Planting trees or restoring floodplains are labor-intensive tasks that are well suited to the public employment programs often included within stimulus packages. While these kinds of jobs may not be a substitute for high-skill, high-wage jobs, they can be relevant for workers in the informal economy and those returning home to rural areas.
Nature-based solutions can reach other segments of the labor market as well. For instance, thousands of small and medium-sized enterprises are active in forest and land restoration efforts and could contribute directly to job creation and economic growth if supported through stimulus and recovery programs.
Nature-based approaches to economic stimulus and recovery should be especially attractive to developing and emerging economies which rely especially heavily on nature for income and livelihoods. For instance, nearly a third of the GDP of India and Indonesia is generated by nature-dependent sectors (like agriculture, forestry, and fisheries).
The World Bank has estimated that 40 million to 60 million people (especially in Africa) will be pushed into extreme poverty as a result of the pandemic. Supply chain disruptions due to the coronavirus pandemic will have direct impacts on rural communities in many of those countries, many of which produce primary goods, like agricultural products, for foreign markets. Tourism is another of the hardest-hit sectors, and one that is critical to the economies of many developing countries. Stimulus efforts that focus on nature-dependent sectors can help countries avoid having more vulnerable people fall below the poverty line.
Many countries have advanced nature-based solutions within their economic development strategies, Nationally Determined Contributions (NDCs) and national adaptation plans. For instance, Malawi has invested in growing trees to protect the livelihoods of the 80 percent of its people that are farmers. This small African country is dedicating 1.5 percent of its domestic budget to its Youth Forest Restoration Program, employing thousands of young people to revitalize 50,000 hectares of land. As part of the global Bonn Challenge, countries like Malawi have pledged to restore 150 million hectares of degraded land through the locally-led AFR100 in Africa and Initiative 20x20 in Latin America and the Caribbean. Chile will restore 1 million hectares of land as part of its NDC, and many other countries are developing national and landscape-level strategies that ensure long-term success.
However, countries often lack the budgetary resources to invest in scaling up these approaches without external support. As bilateral and multilateral donors reorient development assistance in the wake of the pandemic, they should look for opportunities to support nature-based solutions given their “triple-dividend” benefits. Countries and donor institutions can also explore opportunities for “debt-for-climate” swaps that link debt forgiveness to investments in forest management and other nature-based solutions.
Five Action Areas for Restoring Ecosystems and Economies
Almost a quarter of the world’s land area has been degraded over the past 50 years, costing the world an estimated $6.3 trillion a year (8.3 percent of global GDP in 2016) in ecosystem service value. Restoration activities, from “rewilding” ecosystems to regenerating farmland, offer a diverse array of economic prospects. For example, they generate an estimated $7 to $30 in benefits for every dollar invested. Below are five key action areas for COVID-19 stimulus efforts where restoration activities can deliver economic and many other benefits.
- Restore agricultural land. World Resources Institute research shows that restoring 160 million hectares of degraded agricultural land could generate $84 billion in annual economic benefits to national and local economies. Such efforts could boost smallholder farmers’ incomes in developing countries by an estimated $35 billion to $40 billion per year. This could also provide additional food for nearly 200 million people at a time when concerns are rising about food security impacts from COVID-19-related economic dislocation. In Niger, farmer-managed natural regeneration efforts (which involve encouraging trees to regrow on farms while stabilizing soils to reduce erosion) already generate $280 million per year in ecosystem benefits and yield increases, which provide food for 2.5 million people.
- Restore forests. Restoring degraded forests has significant economic potential in many countries. In the United States, the “restoration economy” already generates an estimated $9.5 billion in annual economic output and directly supports more than 125,000 jobs. An annual federal investment of $4 billion to $4.5 billion could more than double that — creating more than 150,000 jobs per year, three times as many jobs as logging currently supports and many more jobs per dollar invested than other industries. These jobs include foresters, botanists, technicians, and laborers. Maintaining this investment over 20 years could restore up to 60 billion trees by restocking degraded forests as well as establishing agroforestry and silvo-pasture systems, expanding urban forests, and reforesting non-agricultural lands. These opportunities, which are found mostly on private lands, could support underserved rural and urban communities by bringing $6 billion to $12 billion per year in economic growth.
- Leverage existing jobs programs. Major public works and rural employment programs in many developing countries, from Ethiopia’s Productive Safety Nets Program to India’s Mahatma Gandhi National Rural Employment Guarantee Act, already include a strong focus on land and water management, reforestation, and soil conservation. They are a good existing platform from which to generate rural jobs that restore degraded ecosystems and increase climate resilience. Some countries have already taken advantage of opportunities to leverage existing programs in their COVID-19 response packages. In Pakistan, for instance, more than 60,000 unemployed laborers are being paid to set up tree nurseries, plant trees, and monitor forests through the country’s ongoing 10 Billion Tree Tsunami program.
- Link economic support with environmental management. Governments can adopt innovative approaches that link direct economic support to rural communities and natural resource users with improvements in environmental management. In Australia, for instance, the state of Queensland established a $345-million Land Restoration Fund offering additional revenue for farmers adopting practices that reduce water consumption and runoff, contributing to diversified income, increased land value, greater productivity, and higher employment.
- Manage and protect natural areas. Alongside restoration, there are strong employment and other economic benefits to directing recovery funds to the management and conservation of natural areas. The Food and Agriculture Organization estimated during the previous global financial crisis that investments in sustainable forest management could create 10 million new jobs worldwide. Protected areas directly generate jobs associated with protection and management of those areas, as well as indirectly in the tourism sector. In Europe, the Natura 2000 Network of protected areas supports 4.4 million jobs, while providing ecosystem services and socioeconomic benefits worth $226 billion to $339 billion per year. The Great American Outdoors Act, which was approved by the US Senate with bipartisan support on June 17, would provide $3 billion to restore parks and support land and water conservation; it would create at least 100,000 jobs, according to US Sen. Cory Gardner (R-CO), one of its chief sponsors.
Critical Infrastructure Services at Lower Cost
Protecting, managing, and restoring nature can also provide critical infrastructure services. The world needs to invest an estimated $15 trillion in new infrastructure by 2030. Economic recovery packages typically include significant public works and infrastructure components that provide jobs and generate growth. While built or “gray” infrastructure will play a key role in response packages, natural or “green” approaches have much to offer to economic recovery efforts in both rural and urban areas.
Natural infrastructure is generally labor-intensive in terms of both construction and maintenance; yet it also tends to be less costly with, in some cases, shorter lead times than built infrastructure. In addition to supplying core infrastructure services, like flood control and improved water quality, natural areas — whether in rural or urban settings — provide an array of additional benefits that are not always acknowledged. Urban parks can lower temperatures and reduce air pollution. Coastal wetlands provide nurseries for fisheries. And upland forests harbor important biodiversity and offer tourism and recreation opportunities.
The following are some examples of how natural infrastructure approaches can reduce costs and offer other benefits:
- Globally, the benefits of mangrove protection and restoration (i.e., fisheries, forestry, recreation, and disaster risk reduction) have been estimated by the Global Commission on Adaptation at up to 10 times the costs. Protecting mangroves could create $1 trillion in net benefits by 2030.
- In Vietnam, a project to plant and restore mangroves is estimated to save the country $15 million by protecting it from flooding, while also producing additional direct economic benefits from increased yields of shell and oyster collection, honeybee farming, and more.
- In Brazil, researchers found that restoring 4,000 hectares of native forest in São Paulo’s watershed could reduce soil erosion and sediment management costs, yielding a 28 percent return on investment for the water company while also providing benefits in terms of sustaining flows during the dry season.
- In Kenya, the Tana River provides 80 percent of Nairobi’s drinking water and 70 percent of Kenya’s hydropower, but unsustainable agricultural practices are leading to erosion and sedimentation that increases costs. Investing in sustainable land management practices in the delta region would deliver an estimated return of $21.5 million over 30 years as a result of increased power generation and agricultural crop yields, and savings in water and wastewater treatment.
- In Canada, it is estimated that natural approaches to flood management, such as controlling erosion and restricting development in floodplains, could save a single Ontario watershed $305 million.
- In Portland, Oregon, an analysis of options for improving water quality found that green infrastructure would be 51 percent to 76 percent cheaper than water-filtration plant upgrades and would bring ancillary benefits (such as salmon habitat and carbon sequestration) estimated conservatively at $72 million to $125 million.
- New York City saved $1.5 billion by combining green and gray infrastructure to secure water supply for the city instead of pursuing a gray-only strategy. Indeed, green and gray approaches can be combined in ways that improve performance, decrease risk, and lower cost.
Many countries have already identified “shovel-ready” green infrastructure priorities that can be readily incorporated into COVID-19-related stimulus and recovery programs. The United Kingdom announced last year that future flood defense efforts would include a strong focus on nature-based approaches, such as grassland restoration, the creation of buffer strips, and allowing rivers to flow more freely across the landscape. In 2009, the United States provided $1 billion to support climate resilience efforts by state and local governments that included substantial investments in green approaches like wetland restoration. Many of these ongoing projects have been threatened by the current economic downturn but could be reignited by a renewed commitment to green infrastructure as part of a US economic recovery package.
Looking Past the Immediate Coronavirus Response
Responding to the COVID-19 crisis offers the world an opportunity to chart a better future. Nature-based solutions are not a silver bullet, but they can help address immediate needs related to employment and economic growth, while contributing many other societal benefits and, importantly, strengthening our resilience to the other challenges ahead. These approaches can form an important part of a broader “green” approach to economic recovery that creates jobs in the short term, supports economic growth in the medium term, and shifts the global economy toward nature-friendly, low-carbon approaches that provide long-term benefits for sustainability and resilience.
To sustain economic recovery and strengthen our resilience to future risks to our climate, health, and economies, governments will need to embed green approaches into longer-term policy, not just deploy them within short-term stimulus packages. Among the steps urgently needed are subsidy reforms that reduce environmentally destructive land use practices, changes to tax policy that incentivize the conservation and restoration of ecosystems, and strengthened regulations that safeguard nature from further degradation.
As we address the critical health and economic impacts of COVID-19, we must not further weaken the climate and environmental systems that underpin our economies and societies, making us more vulnerable to future shocks. Instead, we need to make decisions and investments that help shift us to a resilient, nature-friendly approach to future economic growth and development.