- The spread of COVID-19 has been hastened and exacerbated by humanity's long-term assault on the natural world.
- The pandemic should serve as a wake-up call that our impact on the environment is not just about carbon emissions.
- It's now time to start addressing the nature-related risks caused by human activities.
Will banks, insurers and investors begin to recognise this health crisis for what it is: a symptom of a trillion-dollar-a-year trade in environmental degradation and wildlife crime?
For those of us who have spent years trying to persuade the finance sector to assess and mitigate the impacts of its activities on the natural world, this is now a big question. COVID-19 demonstrates that it is time for all in the financial sector to think “beyond carbon”, and put nature-related impacts and dependencies firmly onto their risk map. Here’s why.
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Economists estimate the economic fall-out from the COVID-19 pandemic could approach $10 trillion dollars - that’s around one-eighth of global GDP. To prevent a recurrence of this crisis, we need to look less into human health and more into the collective blindness among regulators and within the financial sector when it comes to recognising the huge dependencies the global economy has on biodiversity, and the devastating impacts on us all when our effect on these dependencies becomes increasingly unsustainable.
So does science prove the link between destruction of nature and the emergence of novel diseases like coronavirus? In recent months, several laboratories have investigated the coronavirus’ genome in humans. The nucleic acid sequences sampled from animal viruses found in horseshoe bats offer a good match - one strain from a cave in China’s Yunnan province has a 96% match. This suggests bats are probably the reservoir; but some differences with the human version of the coronavirus suggests modification via another animal. There is a good chance this intermediary was a pangolin, because that species’ version of coronavirus has an especially good ability to bind onto human cells, which the bat version lacks. Such intermediaries could have enabled the virus to make its jump to humans.
The earlier SARS strain, which also originated in bats, had a 99.8% match with one found in civet cats, another species that - like pangolins - is sold illegally in Chinese markets. Only an unnatural cocktail that brings all of these wildlife elements together alongside humans can turbocharge the conditions needed for multiple mutations to take place, resulting in one which eventually outfoxes our immunity - and so the virus explodes.
Humans may not have created the coronavirus, but we have cultured the unnatural conditions needed for nature to toss a $10 trillion-dollar time bomb into our economy. China has at last acted to shut down wildlife markets across the country, albeit 15 years too late. But this is ostensibly a temporary measure. In any case, China is by no means alone in harbouring such markets. A letter sent to the World Health Organisation this week, signed by almost 250 environmental organisations, calls for a massive crackdown on wildlife trade markets worldwide.
But the degradation of nature and the scale of environmental crime, plus the laundering of its proceeds, is far greater than the wildlife market trade alone. The World Wildlife Fund values the illegal wildlife trade at between $15-23 billion a year, making it the fourth-largest illegal trade behind drugs. Europol, meanwhile, estimates that direct environmental crime including logging, fishing and mining could be worth up to $213 billion annually. And the World Bank estimates the full costs of environmental crime, including the loss of ecosystem services upon which the economy depends, to be in the range of $1-2 trillion per year globally.
Coronavirus is an acute reminder of the consequences coming the financial sector’s way if humanity continues to mess with nature. It should be a wake-up call to banks, insurers, investors and businesses that assessing the environmental impacts of their activities should not be confined to carbon emissions.
Governments need to step up, too. A Taskforce on Nature-related Financial Disclosure (TNFD) - an equivalent to the climate task force spearheaded by Mark Carney and Michael Bloomberg in 2017 - is in the works, but must now proceed quickly. This would enable financial markets to better understand nature-related risks and opportunities.
For governments and companies alike, the time to do this is now. Nature-related risk affects many sectors, can be bigger than carbon risk, and can take a bite out of our economy faster than climate change. The time to fix it is now.