Weather & Science
Nature Loss Tied to Higher Government Borrowing Costs in New Study
Researchers at Oxford and LSE found that ecosystem decline led to rising bond yields.
A section of deforestation near La Paz, Guaviare department, Colombia, on July 30, 2023.
Photographer: Ivan Valencia/BloombergWhen a country’s ecology suffers, it likely has a direct impact on its borrowing costs, according to new research from the London School of Economics and Political Science.
Researchers analyzed data on 53 advanced and emerging economies between 2000 to 2020, and found that nature degradation led to an average increase of about 25 to 70 basis points for bonds maturing in two and five years. Rising bond yields usually go hand in hand with higher interest rates.