Biodiversity Decline

What is Biodiversity?

Biodiversity refers to the variety of living organisms across ecosystems, populations, or geographic scales. The term can be measured using a variety of metrics including species richness, species diversity, population demographics, and genetic diversity within or between species. These metrics can be adapted to fit a specific use case, such as the emerging use of satellite imagery to monitor ecosystem and population health.

• Species Richness refers to the total number of different species present within a specific region.

• Species Diversity encompasses both the number of species (richness) and the relative abundance of each species within the population, providing a more comprehensive measure of biodiversity within that region but often requiring additional labor.

• Population Demographics refer to the variation in physical or demographic traits such as age, size, sex, reproductive status, etc, within or between biological populations.

• Genetic Diversity refers to the variety of genes within a population or between populations of the same species. This metric can be used to compare the genetic variability within a single species across different populations or to contrast the gene pools of different species, offering insights into evolutionary processes and the overall health of ecosystems.

  

  Fall foliage in the North Cascades National Park, WA.

Role of biodiversity

Biodiversity is intrinsically connected to ecosystem health, acting as a the foundation for many natural systems and processes. Greater species diversity not only facilitates increased productivity, but also builds ecosystem resilience. According to the diversity-stability theory, biodiverse populations are better equipped to preserver against disturbances such as natural disasters, extreme weather events, and pressures from human related activity then their more homogeneous counterparts. The preservation of biodiversity has become even more crucial as our climate and landscape change at unprecedented rates. Healthy ecosystems provide a variety of ecosystem services which are necessary for the well being of the global economy, environmental health, and life on earth. In 1998, economist Robert Costanza and colleagues estimated such services to generate $33 Trillion USD annually (approximately $64 T USD in 2024). Declining biodiversity threatens the integrity of systems that perform such services and by extension the industries, communities, and nations that rely on these services for their livelihood. Biodiversity at face value is an ecological metric, but also functions as a critical indicator for the well being of species, ecosystems, and many aspects of human life.

Biodiversity Loss

Observed trends

Biodiversity loss refers to the reduction or disappearance of biological diversity, including the loss of species, habitats, and genetic diversity within ecosystems. This phenomenon is a significant environmental concern, as biodiversity plays a crucial role in maintaining the balance and health of ecosystems.

While biodiversity naturally fluctuates over time as ecosystems change and species adapt like many aspects of ecology, recent trends indicate a worrying acceleration in biodiversity loss. Historically, species extinction occurs at a rate of approximately ten percent every million years. However, recent data suggests that the current rate of extinction and biodiversity decline far exceeds historical averages. Some scientists argue that this rapid decline could be the early stages of a mass extinction event, potentially the sixth in the history of life on Earth.

As a result of climate change and human development, the biodiversity of ecosystems throughout the world has been declining. In 2022, the World Wildlife Fund’s Living Planet Report found that populations of measured vertebrate species have declined by an average of 69 % since 1970 . This is in large part due to the repurposing of native habitats for human needs, like crop and livestock production. Poaching of already endangered species, deforestation, and overfishing are direct human activities that contribute to the loss of organismal populations. Climate change has only exacerbated these problems, resulting in habitat loss after climate disasters, water pollution, and rising temperatures that increasingly make lands and waters uninhabitable to native species. These factors combine to cause population decline or extinction of biological life.

The primary causes of biodiversity loss include:

• Habitat Destruction: The alteration or destruction of natural habitats due to human activities such as deforestation, urbanization, and agriculture.
• Climate Change: Changes in climate patterns can alter habitats and ecosystems, making them inhospitable for certain species.
• Pollution: Pollution of air, water, and soil can harm wildlife and plant species.
• Overexploitation: Excessive hunting, fishing, and harvesting of species can lead to their decline or extinction.
• Invasive Species: Non-native species introduced to an ecosystem can outcompete native species for resources.

The loss of biodiversity can have far-reaching consequences, including:

• Ecosystem Instability: Reduced biodiversity can lead to weakened ecosystem resilience and functionality.
• Loss of Services: Ecosystems provide essential services like pollination, water purification, and climate regulation. Biodiversity loss can impair these services.
• Economic Impact: Many industries, such as agriculture and pharmaceuticals, rely on biodiversity. Its loss can have economic repercussions.

Efforts to mitigate biodiversity loss include:

• Protected Areas: Establishing and managing protected regions to conserve habitats and species.
• Sustainable Practices: Promoting sustainable agriculture, forestry, and fishing to reduce environmental impact.
• Conservation Programs: Implementing species-specific conservation programs and breeding endangered species in captivity.
• Policy and Legislation: Enacting laws and policies to protect biodiversity and regulate activities that contribute to its loss.

Projected Biodiversity Loss

Increasing efforts to measure and preserve biodiversity have aided in the understanding of how this valuable resource will change in the future, however, concrete estimates on future biodiversity decline are limited. Current estimates from an expert panel indicate that if trends continue, an estimated 37% of species could be under threat or extinct by the year 2100. Over the coming decades, climate change is expected to play a larger role in biodiversity loss. As carbon emissions increase, temperature and habitat change will decrease nature's ability to sequester carbon and perform ecosystem services, thus feeding back into the cycle. The largest influence over this change is how countries and organizations across the world respond to the crisis. At current rates, biodiversity is predicted to continue falling at catastrophic rates. In their 2022 Living Planet Report, the World Wildlife Fund outlined their hope for a net positive impact on biodiversity by 2050 relative to a 2010 baseline. This pathway included an aggressive change in conservation measures alongside new sustainable consumption and development practices.

Biodiversity-related Financial Risks

Calculating the financial risk from biodiversity loss involves analysing how the degradation of biodiversity and ecosystem services could affect the economy, assets, and livelihood of communities or businesses on a local, national, or global scale. In order to calculate the current and potential impact, biodiversity trends need to be leveraged with corresponding financial models, quantifying a community or industry's reliance on biodiversity and ecosystem services. Sectors like fisheries, agriculture, ecotourism, forestry, and pharmaceuticals are all heavily dependent on the consumption of ecosystem services. The decline of such resources can result in commodity, supply chain, and business continuity risks. Report by the World Economic Forum suggested that these risks can be assessed using categories that are broadly consistent with the climate risk categories defined in the TCFD, that is:

Physical Risks: Physical risk from biodiversity loss can impact any aspect of an industry supply chain. Commodity risks such as fishery or crop decline impact businesses at the core of their production process. Decreasing commodity supply can also result in supply chain risks as products have to be sourced from different locations. Damage risks from a degrading natural environment is also a possibility, a common example in coastal and riparian zones where biomass is a key buffer protecting property from storms and flooding. Value Risks can affect businesses or properties directly, as a changing ecosystem can decrease the value of real estate or lower revenue from ecotourism services.

Regulatory and Legal Risk: Many industries have to follow regulations set by local/governmental bodies. As the decline of biodiversity and key species worsens, these restrictions and the consequences for violating such rules are likely to become more severe. These regulations, laws, and certifications act as a driving force toward more sustainable behavior and often include incentives once completed but not without an added cost until that change is made.

Market Risk: A loss of biodiversity accompanied by awareness of physical and regulatory risk, or increased cost on consumers has the potential to shift entire markets. Recent data indicates that products indicating environmentally sustainable practices grew up to 17.5-24.5% over a period of three years.

Natural Capital Accounting (NCA)

Natural capital accounting is the process of quantifying the value derived from ecosystem services, and integrating this information into corporate or governmental accounting framework. The value ecosystems provide such as fresh air, filtered water, and bioremediation is often excluded from traditional financial analysis. NCA allows for the inclusion of such values, and enables businesses or governments to visualize the economic benefits associated with conserving ecosystems as well as the potential cost of losing valuable biodiversity. This approach can inform policy and investment practices to promote biodiversity and build a sustainable economy.