Externe Publikationen

Biodiversity and the future creditworthiness of nations

Agarwala, Matthew / Pati Klusak / Matt Burke / Moritz Kraemer / Ulrich Volz / Benjamin Sovacool
Externe Publikationen (2026)

in: Nature Ecology & Evolution, forthcoming

Forthcoming

Climate change, biodiversity loss, and deforestation present increasingly material financial risks. Yet, whilst macroeconomic studies on biodiversity often value natural capital and ecosystem services to human wellbeing, they do not quantify risks to financial assets. Sovereign debt is the means through which countries invest in themselves, yet continued environmental degradation undermines economic performance making this type of debt riskier and costlier, ultimately reducing the ability of nations to invest in nature or endure shocks. The primary indicator of national creditworthiness – sovereign credit ratings – currently omit biodiversity and other nature-related risks, meaning financial markets may be mispricing, mismanaging, and misallocating $71 trillion of financial assets, with direct implications for both the natural environment and public investment and global financial stability. We directly incorporate biodiversity and nature-related risks into assessments of sovereign creditworthiness. We extend S&P Global’s sovereign ratings methodology to assess creditworthiness of 23 nations under a range of scenarios relating to changes in tropical timber production, wild pollination services, and marine fisheries. Although seemingly a small sample of nations, these countries have a collective population of 5.5 billion people. We find that a partial ecosystem collapse scenario increases the annual debt payment faced by India and China by $49bn and $70bn, respectively. This is equivalent to 2.4% of the median Indian’s annual after-tax income. Across the sample, the additional annual interest burden could reach $162bn, nearly reaching the $200bn/yr target for conservation support under the Global Biodiversity Framework. Some countries, such as Angola, Bangladesh, Democratic Republic of Congo, and Madagascar, could face GDP losses of more than 15% by 2030.

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