Working paper

The Economic Challenges of Biodiversity Loss in Africa and Measures Implemented to Limit It

Published on the 26th of December 2024
Authors : Camille Fabre, Paul Vertier

Working Paper Series no. 984. While African countries have a particularly rich biodiversity, this has been deteriorating markedly for several decades, and seems to be accelerating in recent years. This degradation of biodiversity has consequences both at local level—African populations, mostly rural, are heavily dependent on ecosystem services—and at global level, given the major implications of biodiversity degradation for global warming, health, food security and global financial stability. Biodiversity conservation in Africa is therefore a major challenge, and its linkage with the continent’s economic development objectives raises a number of issues. To study this question, this paper combines geolocated data on economic activity and on a specific measure of biodiversity, namely vertebrate population counts, between 1990 and 2015. It shows that an increase in local economic activity is associated with a decline in local vertebrate populations, and discusses this result in light of the challenges facing Africa. It also documents the protection measures implemented both locally and globally to promote biodiversity preservation, as well as the challenges they face.

Figure 1. Correlation between the variations of local GDP and of vertebrate populations

Image WP984
Source: Living Planet Database, Kummu et al. (2018), authors’ computation
Note: the figure is a binscatter plot, net of fixed effects with respect to Living Planet studies and to pairs of years between which the variations of biodiversity and GDP are computed, but without control variables.

While African countries have a particularly rich biodiversity, this has been deteriorating markedly for several decades, and seems to be accelerating in recent years. This degradation of biodiversity, which might be exacerbated in the next decades as Africa is expected to experience rapid economic and population growth, has consequences both at local level - African populations, mostly rural, are heavily dependent on ecosystem services - and at global level, given the major implications of biodiversity degradation for global warming, health, food security and global financial stability. The preservation of biodiversity in Africa is therefore essential, and its linkage with the continent's economic development objectives raises a number of issues. In this context, it is crucial to analyze whether and how economic growth and biodiversity preservation can be achieved simultaneously. Yet, while research in environmental biology led to a consensus that biodiversity loss is linked to economic activity, research from economists is scarce, and contributions documenting the effect of general economic activity (as measured by GDP) on biodiversity are inconclusive, notably because of limited data availability.

This paper has therefore two main goals: (i) proposing an original evaluation of the effect of GDP growth on biodiversity, with a focus on channels of particular importance for Africa, and (ii) discussing existing initiatives to limit biodiversity loss, as well as the challenges they face, notably in Africa.

We evaluate the correlation between GDP growth and biodiversity loss by matching geolocated surveys of vertebrate populations from the Living Planet Database (2022) with very granular local GDP estimates from Kummu et al. (2018), bearing on the period 1990-2015 (latest data available). Using panel fixed effects models, we estimate that a 1 % increase in local GDP is on average associated with a 0.3-0.5 % decrease in vertebrate population. To provide a more causal interpretation, we implement an instrumental variable strategy, where GDP growth is instrumented by the commissioning of power plants within a 10-to-100 kms radius around the survey location, and still estimate negative and significant effects. We document that population growth contributes more than GDP per capita to biodiversity losses, in line with a large literature documenting the effects of urbanization.

We then show that the effects follow a hump-shaped pattern: the strongest negative effects of GDP growth are observed in locations with intermediary GDP levels, which might reflect a stronger prevalence of industry. The smaller effects for high levels of activity might reflect an effect of better institutions, but also a stronger  prevalence of services, whose value added might be measured less precisely in local GDP estimates (since the value added of services might depend on productions localized in different areas).  Overall, these results suggest that policies implemented by African countries will crucially affect their ability to simultaneously achieve strong economic growth and biodiversity preservation. 

We then discuss existing local and global initiatives to limit biodiversity losses in Africa. The continent is both affected by and contributing as other countries to global biodiversity loss, calling for coordinated action. We discuss some implications of the Kunming-Montreal Global Biodiversity Framework (GBD), established in 2022 following the 15th Conference of the Parties (COP) to the United Nations Convention on Biological Diversity. Among them, we notably discuss i) conservation targets such as the “30 x 30” target, (i.e. a target of 30% of land and ocean area conserved by 2030 in protected areas or local conservation measures), ii) commitments to increased funding from developed countries, and iii) innovative financial mechanisms. We also cover some of the policies implemented locally by African countries, such as protected areas and forest management certifications, discussing their effectiveness, the challenges they face, and some of the solutions proposed to overcome the latter.
 

Keywords: Biodiversity, Growth, Africa, Development.
JEL classification: Q57, Q54

Updated on the 26th of December 2024