How does the loss of biodiversity impact economies and human well-being?
In this episode of VoxDevTalks, Tim Phillips interviews Eyal Frank from the Harris School of Public Policy at the University of Chicago, an economist working at the intersection of economics and conservation. Frank discusses how economic thinking has traditionally neglected natural habitats and biodiversity, treating them as external to economic systems.
"In a lot of cases, when we think about economic development, it comes at the expense of habitats or environmental conditions that are important for the survival of species."
Economists have often assumed that human-made substitutes can replace natural functions, leading to insufficient attention to what ecologists call the biodiversity crisis. Frank's research seeks to quantify the real-world impacts of biodiversity loss using economic tools, data analysis, and causal inference.
Why conservation matters in the Global South
The conversation highlights how the loss of nature is particularly severe in developing countries. The Global South, already facing numerous economic challenges, is also disproportionately affected by environmental degradation.
"Like climate change, the Global South is experiencing the repercussions of [biodiversity loss] faster, sooner, and with greater force than in middle- and high-income countries."
Frank's research explores how biodiversity declines in these regions have direct economic and social consequences, from food security to public health.
The case of bats and pest control in the US
One of Frank’s key studies focuses on the role of bats in natural pest control and how their sudden decline due to disease impacted agriculture and human health. A fungal disease known as White-nose syndrome wiped out bat populations across the US, creating a unique natural experiment.
"The declines were so severe that in just two, three, maybe five years, bat populations of different species went completely locally extinct."
Bats consume large numbers of insects, providing free, natural pest control. With their decline, farmers increased their use of chemical insecticides by nearly 30% per square kilometre. This increase had significant economic and environmental consequences, including:
- Greater financial costs for farmers
- Increased exposure to toxic pesticides
- Potential negative impacts on human health, as shown by increased infant mortality rates in affected areas
India’s vanishing vultures and public health impacts
Another striking case study comes from India, where the social costs from the collapse of the vulture population have been extremely high. With vultures gone, decaying animal carcasses were left in the open, leading to:
- Increased pollution in water sources
- A surge in feral dog populations, leading to higher cases of rabies
- A rise in all-cause mortality in human populations, estimated at an additional 100,000 deaths per year
The policy response to this crisis has been slow, with costly alternatives like incinerators or mass dog vaccination being considered but not widely implemented.
"We have all these readily available human based substitutes or policy interventions. They're prohibitively expensive, so even though they're available to us, we're not using them, which, in a way, highlights how big and important the value was that vultures were providing to us for free by scavenging on all of those dead animals."
The economic case for monitoring desert locusts
Frank also discusses his research on desert locusts, which pose a severe threat to food security in parts of Africa and the Middle East. Locust swarms form under specific environmental conditions and can multiply exponentially if left unchecked.
"Within just a year, every two three months, you're seeing this increase in locusts by a factor of 20. You very quickly go from a somewhat small swarm to a swarm that covers the land size of about a Manhattan and a half."
Monitoring locust populations is expensive, requiring international coordination, field surveys, and aerial pesticide application. However, failing to invest in prevention leads to devastating locust plagues, as seen in 2019–2020 when swarms devastated crops across multiple countries.
Economic analysis reveals that the cost-benefit ratio of investing in monitoring and control is as high as 10:1, meaning every dollar spent on locust control yields at least ten dollars in benefits through avoided food insecurity and economic losses.
Humanity’s role in the sixth mass extinction
The podcast concludes with a discussion on the broader implications of biodiversity loss. Frank references his research paper, which quantifies how human activity is driving species extinction at an unprecedented rate.
"The key problem now is that species exiting the global stage and becoming extinct appears to be happening at a rate that is 100 times or 1,000 times greater than the normal background levels for that process. The velocity at which extinctions are happening is accumulating to such a degree that ecologists are referring to this as the sixth mass extinction."
Human activities, from deforestation to pollution, are pushing ecosystems to collapse, with far-reaching consequences for global stability. The challenge now is finding ways to integrate ecological preservation into economic decision-making.
Final thoughts: The need for a new economic framework
The episode underscores the importance of bridging economics and conservation science. Policymakers and researchers need to rethink how natural resources are valued in economic systems and implement sustainable policies before irreversible damage occurs.
Frank’s work highlights the complex interplay between nature and economics, urging for a more integrated approach to conservation and policy planning.