Almeida, Elena, Senni, Chiara Colesanti and Rastoka, Jelica (2025) Exploring the interactions between nature loss drivers, vulnerabilities and economic impacts. CETEx Discussion Paper Series: Land and Ocean (3). Centre for Economic Transition Expertise (CETEx), London School of Economics and Political Science, London, UK.
Full text not available from this repository.Abstract
Nature loss presents significant economic and financial risks by disrupting the ecosystem services essential for economic stability and societal wellbeing. Its impacts vary widely across regions and sectors, often exacerbated by vulnerabilities such as supply chain interdependencies and resource dependence. We analyse 14 case studies to understand recurring patterns from historical nature loss events and create insights for developing proactive and integrated strategies to address these multifaceted challenges. Incidences of olive tree disease, harmful algal blooms and cod species demise stand out in particular for the diverse and ongoing challenges they present. These examples underscore how the same drivers can yield vastly different macroeconomic outcomes depending on the vulnerabilities present. Nature loss reduces total factor productivity, a fundamental driver of GDP growth, while also disrupting labour dynamics and population growth. Weak institutions, limited economic diversification, and overdependence on natural resources amplify these effects, creating cascading risks. The heterogeneity of nature loss impacts, both regionally and across agents, complicates economic recovery and risk management. To address these challenges, we recommend: 1) adopting advanced multi-agent economic models to better capture the heterogeneity of impacts; 2) implementing targeted financial and fiscal interventions to enhance resilience; 3) strengthening prudential regulation to manage nature-related financial risks; and 4) integrating ecosystem services into risk assessments and economic planning to anticipate and mitigate potential crises
| Item Type: | Monograph (Discussion Paper) |
|---|---|
| Official URL: | https://cetex.org/publications/ |
| Divisions: | Grantham Research Institute |
| Subjects: | H Social Sciences > HD Industries. Land use. Labor S Agriculture > S Agriculture (General) Q Science > QC Physics H Social Sciences > HG Finance |
| Date Deposited: | 29 Aug 2025 23:03 |
| Last Modified: | 29 Aug 2025 23:03 |
| URI: | http://eprints.lse.ac.uk/id/eprint/129323 |
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