Natural capital: how much is a wetland worth to the economy? 

Wetland conservation is not just essential for protecting the environment and biodiversity, it has important economic benefits and brings about better well-being in society.

Wetlands are natural settings, home to a great variety of animal and plant species. Their conservation is indispensable in maintaining the planet’s biodiversity and helping slow down climate change. But their ecosystems are also highly productive, permitting human development from economic benefits.

 

In ancient times, they knew all about these benefits. The Roman cities of Astigi and Urso – today Ecija and Osuna in Spain – organized the area between them, containing eight lakes, for salt production, agriculture and livestock, connecting the wetlands to their urban centers through a network of paths and dales favorable to commercial traffic.

 

What will I learn from this article?

Wetlands are natural or artificial environments which fluctuate between land and water with diffuse limits that can also vary through time, characterized by hosting unique, dynamic and species-rich ecosystems. Today, they cover between 4% and 6% of the planet’s surface.

 

Their conservation is crucial in maintaining their great biological diversity, regulating the climate, controlling floods and droughts, facilitating water cycles, and capturing carbon from the atmosphere. But their fluctuations and dynamism also make them one of the most fragile ecosystems on Earth.

 

Studies have identified 30 kinds of natural wetlands, and 9 artificial, although the Ramsar Convention classifies them into five main systems:

  • Estuaries. Mouths of rivers in which freshwater and saltwater mix, forming deltas, mudbanks and marshes.
  • Marine wetlands. Found on the coast, created by the sea, its currents and tides, e.g. mangrove swamps, saltmarshes and coral reefs.
  • River wetlands. Flooded or floodable areas created along the river course as a consequence of periodic or occasional overflowing, e.g. flooded forests and oxbow lakes.
  • Marshes, swamps. Enclaves situated on land, usually holding permanent shallow water, such as reed and grass marshes, and mudflats.
  • Lakes. Areas covered with water, almost always stable and permanent, characterized by depth, such as lagoons, glacial lakes and those formed in the craters of volcanos, and swamps.

Some experts warn that around 80% of wetlands have been lost since the 18th Century as a result of urban growth, agricultural and industrial activity, and climate and biodiversity change. Ramsar data shows that 35% of these wetlands have disappeared over the last 50 years.

 

This led to the signing of the Ramsar Convention on Wetlands in 1971 with the aim of working toward their conservation, protection and rational use, and recognizing their ecological, hydrological and socioeconomic value. Wetland conservation is essential to preserving the planet’s biodiversity. Wetlands often act as natural filters of water, eliminating pollutants and improving its quality, and also contribute to capturing carbon naturally, which helps reduce climate change.

Not only does their degradation have devastating consequences for the environment and the climate, it also has an enormous negative impact on the global economy. Wetlands possess great natural capital and high productive value, contributing 7.5% to global GDP, or 47.4 trillion dollars, annually. Taking into account the current rate of degradation - according to Ramsar the loss is running at 20% - we are talking about economic losses estimated at around 39 trillion US dollars. To reverse this situation, another Ramsar Convention report recommends dedicating between 275 and 550 billion dollars to detain the degradation and restore damaged wetlands. Conserving and protecting wetlands is not an exclusively environmental task and it’s hoped that the economic valuation of their loss could encourage political decision making and corporate involvement in an increasingly unstable economic and geopolitical context, as well as helping design more efficient management strategies and incorporating a fair transition from the social viewpoint.

To understand better the economic and productive implications the degradation of these ecosystems could represent, it is necessary to see how they contribute to our well-being. Nor should we lose sight of the fact that the production of goods and services related to wetlands represents a way of living for one in seven people worldwide.

  • Supply services. Includes the different material goods that wetlands can provide for the population:
  • Agricultural and aquacultural use. One of the most extended uses is agriculture, with rice production for more than 3.5 billion people (20% of the calories humanity consumes). Wetlands are also the source of other foods such as fish and shellfish from fishing and aquaculture.
  • Sustainable extraction of other raw materials like salt, bulrushes, clay, wood, vegetable carbon and medicinal plants.
  • Freshwater supply, filtered naturally for human and animal consumption and agricultural use.
  • Energy generation through hydroelectric power stations.
  • Management services. Derived from the different natural and artificial functions in wetlands, not forgetting environmental conservation services.
  • Preservation of the natural environment and biodiversity. Public services dedicated to the preservation and creation of protected natural parks.
  • Water and waste treatment. Services that preserve natural elements and building of complementary artificial infrastructure.
  • Control of extreme phenomena. Construction and management of infrastructure for regulating flooding and drought.
  • Water cycle management for human consumption, agricultural irrigation, electricity generation and river tourism.
  • Cultural services. All those services derived from the non-material benefits contributed by wetlands, improving the quality of life of the population.
  • Recreation and tourism. Wetlands are normally great tourist attractions for their natural beauty and hosting of recreational activities.
  • Education and research. As natural spaces, they can also serve for environmental education and biodiversity research.
Law graduate with a Master's degree in International Business Law. Having practised as a lawyer in the early years of his professional career, he has specialised in business ethics and sustainability. He has worked as a social impact consultant, has been a researcher at the CaixaBank Chair of Sustainability and Social Impact at IESE Business School, and has also taught at other business schools and vocational training centres. Since 2023 he has also been a contributor to Ethic magazine, which specialises in sustainability.
 

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Specializing in

  • business ethics
  • “sustainability”
  • ‘social impact’