How the destructive nature of the country may be faced with financial crises
Date 23 Jun 2022 time 13:00
The research warns that the destruction of ecosystems affects public finances and a nation’s credit rating.
Reuters cited research from the University of Cambridge’s Bennett Institute for Public Policy. united kingdom which is the world’s first Sovereign Credit Rating based on biodiversity Point out how ecosystem destruction affects public finances. This includes the debt crisis and rising borrowing costs.
The research, published June 22, says that significant global biodiversity loss could wreak havoc on our economy by the end of the decade. As a result, credit ratings in many countries around the world have dropped sharply.
The research team looked at various situations. including the collapse of important ecosystems Some have destroyed industries that depend on nature, such as agriculture, fisheries and other economies.
“The loss of biodiversity can affect the economy in many ways, for example the collapse of the fisheries sector. This will affect the country’s supply chain. and other industries,” said Dr. Patrycja Klusak, one of the research team.
The research estimates these impacts will result in 58 percent of the 26 countries studied face at least one national rating downgrade as a result of the amount governments have to pay on borrowing in the market. global capital
“Effect Rating Under Partial Ecosystem Collapse Scenarios In many cases, this is significant and tangible,” the research said, adding that rising costs of debt would hurt national finances.
Case studies conducted by the University of Cambridge, University of East Anglia, Sheffield Hallam University. and the Orient College of Education and African Studies. University of London This shows that China and Malaysia are the countries that will be most severely affected. It faces more than six ratings downgrades in the country.
The downgrade in China’s credit rating comes as China pays an additional $12-18 billion in annual interest rates. Meanwhile, the highly indebted sector will have additional costs of $20-30 billion.
Malaysia’s expenditure will increase between $1-2.6 billion. while companies It will cost an additional $1-2.3 billion.
India, Bangladesh, Indonesia and Ethiopia will face about four cuts, and nearly a third of all countries studied will face at least three cuts.
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