McKinsey & Company released a methodology to evaluate where safeguarding natural capital could have the biggest impact on climate, economies, and human health. The report titled, ‘Valuing Nature Conservation: A Methodology for Quantifying the Benefits of Protecting the Planet’s Natural Capital,’ was issued on 22 September 2020, ahead of the first UN Biodiversity Summit.

The report highlights the global economy’s dependence on natural capital, and argues that “analysis of opportunities to expand nature conservation can help determine where natural capital could have the biggest impact on climate, jobs, and health.”

Noting scientists’ call for the permanent conservation of at least 30% of the planet’s surface by 2030, the report identifies the need for “rigorous data-driven analysis” to enable decision makers to design conservation efforts that would also capture benefits and manage risks, and to make informed trade-offs. In an effort to contribute to such efforts, the report provides a methodology to evaluate the full spectrum of co-benefits from nature conservation.

The report’s authors used “advanced geospatial analytics to create and evaluate alternative nature conservation scenarios and explore trade-offs.” The authors divided the planet’s surfaces into “pixels” (land areas of 5 kilometers by 5 kilometers and marine areas of 30 kilometers by 30 kilometers), reaching a total of around 6 million pixels. They overlaid the resultant “global map with thousands of spatial data layers” covering variables such as biodiversity, carbon stock, and human footprint “to establish a baseline for nature conservation and define six alternative scenarios to maximize the value from expanded conservation.” The authors then assessed the impact of expanded conservation on climate change, jobs, gross domestic product (GDP), zoonotic disease risk, and biodiversity, calculating the additional operating costs of conservation.

The report finds that, depending on the conservation scenario, doubling the amount of conserved land and national waters could require an additional USD 20 billion to 45 billion a year. In more than half of the conservation areas identified, it notes, “the economic benefits from ecotourism and sustainable fishing alone could outweigh these costs by at least three times.” At the same time, the benefits of doubling the amount of conserved land and national waters could include:

• annual reductions in atmospheric carbon dioxide (CO2) by 0.9 gigatons to 2.6 gigatons;
• creation of 400,000 to 650,000 jobs in conservation management fields, along with generating or safeguarding USD 300 billion to 500 billion in GDP and 30 million jobs in ecotourism and sustainable fishing; and
• lowering the risk of new zoonotic diseases.

The authors acknowledge that expanding the conservation of natural capital at the local and global levels would require action by multiple stakeholders. They offer the following recommendations:

• Private-sector organizations would benefit from understanding the growing risks to supply chains and operating assets from the loss of natural capital, which could also help them identify nature conservation investments to address these risks.
• National governments could use the methodology “to better understand the investment case for expanding nature conservation.”
• Intergovernmental organizations could “use analytics to identify conservation targets, support national governments in making conservation investment decisions, and promote international dialogue.”
• Conservation practitioners and donors could use the geospatial approach to identify areas to invest in and build alliances for stakeholder engagement to increase the number of conservation projects worldwide, while ensuring their effective and efficient implementation.

McKinsey & Company is a global management consulting firm that provides advice on strategic management to corporations, governments, and organizations. [Publication: Valuing Nature Conservation: A Methodology for Quantifying the Benefits of Protecting the Planet’s Natural Capital] [Report Website]