Russian and Italian economists have investigated the impact of financial and banking crises on ecosystems, finding that over the past fifty years, these crises have significantly contributed to the decline in the number and species diversity of animals and plants on the planet. This is due to a decrease in investment in environmental solutions and other negative factors.
Crises provoke some businesses to move into the informal sector, where the application of environmental standards is difficult or ignored. This leads to uncontrolled exploitation of resources, poaching, illegal logging, and uncontrolled emissions. Ultimately, crises reduce investment in new environmental solutions.
The study was based on data from the Living Planet Index and an international crisis database. Scientists created a model to assess their impact on the level of biological diversity.
It turned out that triple crises were recognized as the most dangerous for the environment, while debt and currency crises became less significant. Scientists explain this by the fact that banking crises negatively affect GDP, reducing the capacity of states in the field of environmental policy.
To mitigate this effect, experts emphasize the need to coordinate the efforts of central banks and environmental regulators.
It is necessary to actively introduce green risk coefficients into regulations and form interdepartmental working committees.