Economic development, institutions, and biodiversity loss at the global scale

Current accelerating biodiversity loss is by many conservationists regarded as a result of economic development. Some economists agree on this viewpoint but argue it is valid at low income levels because of the need to secure a minimum living standard. On the other hand, economic development at higher income levels can instead mitigate biodiversity loss because of improved willingness and affordability to implement measures such as protected areas. This so-called environmental Kuznets relation is tested in this study by econometric analysis of cross-sectional data on a global scale. However, the results do not support this relation. Instead, we found a relation between economic and institutional development where economic development decreases biodiversity loss at a minimum level of institutional quality, i.e. minimum capacity to implement and secure property rights for the citizens. Our results thus question policies that neglect institutional quality for reversing biodiversity loss. Further, it was found that biodiversity loss increases with invasive species, high average temperature and precipitation, and spatial autocorrelation.