The world’s leading independent conservation organisation has warned of emerging risks amid environmental decline, forecasting the amount in damages and losses if the economy is not future-proofed.
According to the WWF report
Developing and piloting a UK Natural Capital Stress Test (NCST), a repeat of the 2013/14 winter floods in 2050 – assuming continued population growth and limited action on climate change – would result in a 70% rise in the costs of physical damage to property to £2.2 billion.
The report sets out the results of a study that developed and piloted a new NCST for the UK aimed at helping track emerging environmental risk ‘hotspots’ in the economy. Findings showed that the loss or degradation of natural capital could lead to significant impacts on the national economy by 2050 if actions are not undertaken.
“We have some major environmental challenges coming our way, and our economy needs to be future-proofed,” said Karen Ellis, WWF’s chief adviser on economics and development. “From increased risks of flooding, to soil erosion, drought and air pollution, our environment is changing quicker than people think.”
Ellis added: “A stress testing approach, and a long-term plan for managing our natural capital, would enable the UK Government to better understand and manage these risks. The UK Government must start addressing these issues properly or it is going to cost us all money and some of us might even lose our jobs.”
According to the study, more of the future damage costs related to flood would fall on housing and businesses. “Together, these two sectors could account for more than half of the total damage costs of a flood in 2050 (up from 46% in 2013/14),” said the report.
WWF noted that under the trends assumed in the scenario, the implication is that these sectors would become more exposed over time. However, due to a lack of data, the projection for 2050 does not include the costs of lost production due to disruption to business activity.
In terms of other risks like drought, the forecast is a 1% reduction in gross domestic product (GDP) and the loss of 354,000 jobs in the event of a three-month UK-wide drought in 2050 – that is if there had been continued depletion of water reserves from now until then. If water reserves were protected and maintained at current levels, the estimated impact is a 0.5% reduction in GDP and the loss of 156,000 jobs.
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