The economic value of nature

Nature underpins the global economy in fundamental yet frequently overlooked ways. While certain natural resources, such as timber or rare metals, are traded with structured prices embedded within financial markets, many of the services provided by nature remain unpriced, unaccounted for, and undervalued within conventional economic systems. This invisibility facilitates widespread environmental degradation, predicated on the false assumption that nature is infinitely regenerative. As we confront intersecting planetary crises, including biodiversity loss, climate change, and ecosystem collapse, it is becoming clear that nature has limits.

Increasingly, businesses, economists, and governments are recognising the necessity of assigning economic value to nature, its resources and services, as a means of embedding it within financial decision-making processes. In a world structured so heavily by economic rationale, valuing nature economically is one mechanism to challenge extractive models and to introduce constraints to its exploitation, offering a pragmatic, albeit imperfect, approach to protecting it. Nevertheless, placing an economic value on nature raises methodological challenges. Nature possesses intrinsic, cultural, and spiritual values that defy commodification. 

How do we assess the economic value of nature?

Nature encompasses the totality of the natural world, both living (such as plants and animals) and non-living elements (such as air, water, and climate systems). Biodiversity refers to the diversity of life forms within ecosystems, which in turn underpin critical ecological functions. Ecosystems produce tangible resources, such as timber, water, food, as well as intangible services essential to human wellbeing and survival. At present, economists assign value to the benefits provided by ecosystem services, commonly divided into four categories:

1. Provisioning services, such as food, freshwater, timber, and medicinal resources, are typically valued using market prices.
2. Regulating services, such as climate regulation, flood prevention, and water purification, are often assessed using replacement costs (e.g., the cost of constructing flood barriers in the absence of wetlands), damage avoided (e.g., mangrove buffers during cyclones), or valuation through carbon markets.
3. Cultural services, including tourism and recreation, are valued using indicators such as visitor spending, national park fees, and contingent valuation methods.
4. Supporting services, such as soil formation, nutrient cycling, and pollination, are less directly measurable but can be inferred through their contribution to other economic sectors, notably agriculture.

Other intangible benefits of nature – mental and physical health, cognitive restoration, inspiration, cultural identity, and intergenerational heritage – are notoriously complex to economically value. However, their exclusion from national accounting systems perpetuates underinvestment in conservation.  

What is the economic value of nature?

According to the World Economic Forum, 55% of global GDP, equivalent to approximately 58 trillion US dollars, is moderately or highly dependent on nature, its resources, and ecosystem services. The complexity of valuing nature likely means this is an underestimate of the true economic value. Virtually every sector of the global economy – agriculture, forestry, fisheries, tourism, pharmaceuticals, and even emerging technology – is intricately tied to natural systems. 

Agriculture and food systems

Agriculture accounts for over 4% of global GDP. More than 39% of the global workforce were employed in agrifood systems in 2021, with significantly higher proportions in low-income countries. Agriculture is deeply dependent on ecosystem services, including pollination, soil fertility, water regulation, and climate stability. Biodiversity, particularly wild pollinators and natural pest regulators, plays a vital role in agricultural productivity. For example, bats contribute to higher yields in crops such as coffee and tropical fruits by both pollinating plants and controlling pest populations. Concerningly, the dominance of intensive monoculture is depleting the ecological base upon which agriculture depends. Already, one third of the Earth’s soils are degraded, and if current practices continue, this figure may rise to 90 percent by 2050. Agroecological approaches such as polyculture, permaculture, and regenerative agriculture offer economically viable, biodiversity-friendly alternatives. However, they remain marginal in national policy and subsidy frameworks, which often continue to incentivise intensive monoculture.

Forests and terrestrial ecosystems

The global forestry sector is valued at approximately 600 billion US dollars per year, encompassing timber production, non-timber forest products, and associated industries. Additionally, forests sustain livelihoods for around 1.6 billion people, many of whom live in forest-dependent Indigenous or rural communities. Activities such as honey production, medicinal plant harvesting, and ecotourism depend on intact forest ecosystems. Forests also underpin a range of non-market services, including carbon sequestration, water cycle regulation, and disaster risk reduction. Tropical rainforests alone sequester an estimated 1.4 billion tonnes of carbon dioxide annually. Deforestation for agriculture, mining, or logging imposes profound economic and ecological costs, including increased disaster risks, biodiversity loss, and reduced climate resilience. Efforts to support forest ecosystems are ongoing and include conservation and reforestation initiatives, sustainable land-use practices, and the integration of traditional ecological knowledge into environmental policy.

Marine and coastal ecosystems

The global ocean economy, also referred to as the blue economy, is valued at 2.5 trillion US dollars annually. This includes sectors such as fisheries, aquaculture, shipping, coastal tourism, and marine biotechnology. Fisheries and aquaculture directly employ approximately 58 million people, while up to 600 million individuals worldwide depend on these sectors for food security, income, and employment, particularly in coastal and island nations. Marine ecosystems provide vital regulating services. Mangroves, coral reefs, and seagrass beds act as natural barriers against coastal erosion and storm surges, while storing significant amounts of carbon. For example, one hectare of mangrove can sequester over three times more carbon than a hectare of terrestrial forest, underlining their value to climate mitigation and adaptation strategies.

However, overfishing, illegal fishery practices, habitat destruction, and climate change are eroding marine biodiversity. Large-scale unsustainable fishing practices, such as bottom trawling and the use of illegal fishing gear, exacerbate ecological degradation and erode long-term economic returns. Over 35 percent of fish stocks are now overexploited, while coral reef loss is projected to result in economic loss of 55-76 billion US dollars by 2050. The third United Nations Ocean Conference (UNOC3), held in June 2025, reaffirmed a global agreement to protect at least 30 percent of the ocean by 2030, accelerate ocean-based climate adaptation, and ratify international frameworks such as the High Seas Treaty. These commitments recognise that marine biodiversity is fundamental not only to ecological stability but also to global economic resilience. 

Ecotourism and cultural ecosystem services

The global ecotourism market was valued at approximately 260 billion US dollars in 2024 and is projected to grow to between 650 and 840 billion US dollars by the mid-2030s. Nature-based tourism supports a wide range of industries such as accommodation, transport, guiding services, handicrafts, and food, and is particularly important in biodiversity-rich regions. In Uganda, for example, a relatively modest three million US dollar investment in ecotourism generated 69 million US dollars in economic returns. Australia’s Great Barrier Reef contributes over 6.4 billion Australian dollars annually to the economy and supports 64,000 jobs, while Zimbabwe’s Victoria Falls brings in 6.7 million US dollars in direct visitor fees each year. These examples illustrate the significant return on investment associated with conserving natural heritage. Nevertheless, mass tourism can create ecological pressures and diminish local cultural heritage. Sustainable ecotourism models, which prioritise local benefit-sharing and environmental integrity, are essential for maintaining long-term economic value.

Pharmaceuticals and bioprospecting

The global pharmaceutical industry is worth over one trillion US dollars, and it remains highly dependent on compounds derived from natural sources. Roughly 75 percent of approved drugs are based on molecules originally found in nature, particularly from plants, fungi, and marine organisms. Classic examples include the cancer drug paclitaxel (from the Pacific yew tree), artemisinin (from Artemisia annua for malaria), and anti-hypertensive ACE inhibitors (from Brazilian pit viper venom); similarly, Hypoxis hemerocallidea, a traditional immune-boosting plant used for HIV/AIDS patients, is now found in many over-the-counter medications. Habitat loss and species extinction threaten the natural foundations of drug discovery. The extinction of undocumented species could mean the loss of untapped pharmacological compounds with potential multi-billion-dollar value. Additionally, poor environmental governance, especially in the area of wastewater management and antibiotic overuse in livestock, is contributing to the rise of antimicrobial resistance (AMR). AMR represents a long-term economic and public health threat, projected to cost the global economy up to 100 trillion US dollars by 2050 if left unchecked.

Innovation and technological development

Nature continues to inspire breakthroughs in biomimicry, where engineering and design solutions are modelled on natural systems. This has led to the development of self-cleaning surfaces (inspired by lotus leaves), efficient wind turbine blades (based on humpback whale flippers), and minimally invasive surgical needles (modelled on porcupine quills). Emerging sectors such as bioinspired robotics, green chemistry, and sustainable materials are projected to grow rapidly, underlining nature’s role as a driver of technological innovation and its economic value.

Towards an economy that values nature

Nature is intrinsically interwoven with our economies. Despite its foundational economic role, nature is largely absent from national accounting systems and fiscal policy. This omission, fuelled by exploitative capitalist economic systems, rapid urbanisation, technological abstraction, and cultural detachment from nature, perpetuates the illusion that nature is external to the economy, and results in underinvestment and unsustainable exploitation. The consequences, including climate vulnerability, health deterioration, food insecurity, and economic precarity, are already evident. 

Addressing this omission requires natural capital accounting, innovative financing mechanisms, and policy reform to embed nature as a key player in our economic systems. These mechanisms might include payments for ecosystem services, green taxation, debt-for-nature swaps, and biodiversity credits. At the same time, care must be taken to avoid commodifying nature in ways that undermine its intrinsic and communal value. A resilient, inclusive, and sustainable global economy depends on recognising nature not as an externality, but as its very foundation. The question then, is no longer whether we can afford to invest in nature, but whether we can afford not to.