The Cost of Inaction and the Value of Natural Capital

Climate change is an undeniable reality, with increasingly visible impacts across the planet. Extreme weather events, such as hurricanes, floods, droughts, and wildfires, have become more frequent and intense, causing increasing human and material losses. In this scenario, post-extreme climate event reconstruction requires ever-larger investments, which calls into question the sustainability of the current development model and highlights the need to rethink recovery and adaptation strategies.

Rebuilding after each disaster, with increasingly higher costs, does not seem to be the most intelligent solution. The current development model, focused primarily on economic growth, has proven unsustainable in the face of the challenges posed by climate change. It is necessary to seek a new model that integrates economic, social, and environmental dimensions, ensuring a more balanced and resilient future for all.

This article analyzes the cost-benefit relationship between post-extreme climate event recovery and nature preservation, focusing on the concept of natural capital. Natural capital, composed of resources such as water, forests, soil, and biodiversity, provides essential ecosystem services to society and the economy. Protecting and regenerating natural capital is fundamental to mitigating climate change, reducing the costs of extreme climate events, and ensuring a more sustainable future.

Rising Costs of Extreme Climate Events

The economic costs of extreme climate events are increasing significantly. The United Nations Office for Disaster Risk Reduction (@UNDRR) estimates global economic losses from natural disasters between 2000 and 2019 at US$2.97 trillion, with a sharp upward trend (UNDRR, 2020). These costs include damage to infrastructure, production losses, business interruption, health costs, and humanitarian assistance. Extreme climate events can have lasting social and psychological impacts on affected communities.

The Value of Natural Capital in Preventing and Mitigating Extreme Events

Nature offers effective solutions for preventing and mitigating extreme climate events. Healthy and resilient ecosystems, such as forests, wetlands, and coastal areas, act as natural barriers, reducing impacts and reconstruction costs.

Protecting and regenerating natural capital can be more efficient and economical than building artificial infrastructure. For example, regenerating mangroves in coastal areas reduces damage from storms and hurricanes more effectively and cheaply than building dikes and seawalls (TEEB, 2010).

Nature-Based Solutions to Mitigate Climate Change

Nature-based solutions (NbS) use ecosystems and ecosystem services to address social and environmental challenges. NbS offer a range of benefits:

Mitigation: Healthy forests, oceans, and soils absorb and store carbon.

Adaptation: Resilient ecosystems protect against extreme climate events.

Security: Nature ensures clean water and food production.

Quality of Life: Healthy ecosystems provide clean air, water, and green spaces.

Examples of Nature-Based Solutions in Regenerative Agriculture

Regenerative agriculture restores soil health and increases its ability to store carbon, helping to combat climate change. Practices include:

No-Till Farming: This technique eliminates soil disturbance, keeping soil cover and microorganisms protected. No-till farming increases water infiltration, reduces erosion, and improves soil fertility, contributing to carbon sequestration and climate change mitigation.

Cover Crops: Planting cover crops, such as legumes and grasses, protects the soil from erosion, improves soil structure, and increases nutrient availability. Cover crops also contribute to carbon sequestration and reduce greenhouse gas emissions.

Biological Pest Control: Biological pest control uses natural enemies to control pest populations, reducing the need for pesticides and their negative environmental impacts. This practice contributes to biodiversity conservation and soil health.

Agroforestry Systems: Agroforestry systems combine the cultivation of trees with agricultural crops and/or animal husbandry. These systems promote production diversification, increase biodiversity, improve soil fertility, and contribute to carbon sequestration.

Conclusions

Preserving and regenerating natural capital is a smart and economical strategy to mitigate climate change, reduce the costs of extreme climate events, and ensure a more sustainable future. Nature-based solutions offer benefits for society, the economy, and the environment.

It is essential that governments, businesses, and citizens recognize the value of natural capital and invest in innovative solutions to protect the planet and ensure a more resilient future.

References:

OECD (2017). Investing in Climate, Investing in Growth. OECD Publishing, Paris. Available at: https://www.oecd.org/environment/cc/g20-climate/synthesis-investing-in-climate-investing-in-growth.pdf ?

TEEB (2010). The Economics of Ecosystems and Biodiversity: Mainstreaming the Economics of Nature: A synthesis of the approach, conclusions and recommendations of TEEB. Available at: https://www.teebweb.org/publication/mainstreaming-the-economics-of-nature-a-synthesis-of-the-approach-conclusions-and-recommendations-of-teeb/ ?

UNDRR (2020). The human cost of disasters: An overview of the last 20 years (2000-2019). Available at: https://www.undrr.org/publication/human-cost-disasters-overview-last-20-years-2000-2019