To tackle environmental crime, track profits through the whole supply chain (commentary)

The world has spent a decade attempting to quantify the value of nature. Forests have been referred to as carbon sinks, while wetlands are increasingly recognized as natural infrastructure. Biodiversity has also found its way into financial markets. Governments and investors have invested billions into carbon markets and conservation finance, including green bonds. However, these efforts have been built upon a financial system that assumes intact ecosystems can generate enough economic value to protect them.

In reality, a destructive economic system has been extracting and selling natural resources for much longer. Land grabbing, illegal logging, illicit gold mining, and wildlife trafficking are typically considered environmental offenses, placing the responsibility on park rangers, customs officials, and specialized police. This perspective, however, fails to capture the full extent of the problem.

A new paper published by the Brookings Institution argues that environmental crimes are a significant obstacle to sustainable development and climate action. These crimes not only damage ecosystems and weaken institutions responsible for their governance but also drain revenue from both legitimate companies and public funds. Simply relying on enforcement measures is insufficient to address a problem that intersects with trade, finance, and local political economies.

The exact size of this global criminal economy remains unknown. While estimates range from $110 billion to $281 billion in annual proceeds, the true figure could potentially be much higher, possibly even in the trillions. This illicit business operates in the shadows, exploiting the very ecosystems it purports to protect.