When we think about GDP, more often than not, we think about taxes, investment and employment. But, at IDEEA, we know it’s much more than that.
Nature provides vital contributions to GDP that are often overlooked.
In Australia, roughly half of our GDP – that’s about $900 billion – is directly dependent on nature and all of it is indirectly dependent on nature in some way.
How do we know?
We used our understanding of natural capital and the ecosystem services nature provides to model the figures for the Australian Conservation Foundation (ACF). We measured the dependency of the Australian economy on nature, as well as the dependency of each state and territory by industry.
You can find detailed results in the ACF report titled The nature-based economy: How Australia’s prosperity depends on nature.
The importance of this report cannot be underestimated.
It shows that:
- Sectors with a very high direct dependence on nature (think primary industries like agriculture, forestry, fisheries), generate $293.6bn per year. That’s nearly 16% of Australia’s GDP.
- Sectors with a moderate to high direct dependency on nature, such as mining, real estate, transport and logistics, accommodation and hospitality, contribute $602.7bn to Australia’s economy. That’s just over 33% of GDP.
- Sectors that have a high or very high direct dependency on nature are responsible for more than three quarters of Australia’s export earnings. Resources currently accounting for nearly 69% of Australia’s export share and agricultural exports over 11%.
- Each Australian state and territory has a different relative direct dependence on nature. Western Australia’s economy is at the greatest risk from nature destruction with 67% of gross value added having a moderate to very high direct dependence on nature. The Northern Territory and Queensland follow with 55% and 53.8% directly dependent on nature.
- Indirectly, there is not a dollar that doesn’t depend on nature. Sectors with a lower direct dependency score still depend upon nature through their value chains, and every worker and consumer needs clean air and water, sustenance, their health and a stable climate.
Want to know more?
Can this work be applied to other contexts?
The IDEEA Group methodology can be applied in many different contexts and in many different economies. This work follows a similar methodology to that used in the report from the World Economic Forum, titled ‘Nature Risk Rising: Why the Crisis Engulfing Nature Matters for Business and the Economy‘.
Please don’t hesitate to contact us if you’d like know more about how we use our understanding of natural capital to help organisations, countries, states and regions to understand the enormous value that nature contributes to all economies.