Albert Chung, for the IFoA's Geopolitics in Sustainability Working Party, considers what biodiversity loss looks like through a geopolitical lens and asks whether counting hectares, trees or treaties is the same as measuring what changed.

Planetary Solvency and the paradox of horizons

The World Economic Forum's Global Risks Report 2026 ranked “biodiversity loss and ecosystem collapse” as the second most severe global risk over a 10-year horizon. In the same report, over a two-year horizon, it does not appear in the top 10.

In April 2026, the IFoA and Anglia Ruskin University published Planetary Solvency: Tipping into the wild unknown. The paper highlights that the recognition of the criticality of the ecosystem services that nature provides remains poor. Its key message is that global biodiversity loss and ecosystem degradation are pushing Earth systems toward irreversible tipping points – creating systemic threats to food security, public health, and global economic stability.

It calls for scenarios reflecting the “joint dynamics of climate, biodiversity, food, health and geopolitical risks”, citing the UK government's National Security Assessment finding that “the cascading risks of ecosystem degradation are likely to include geopolitical instability, economic insecurity, conflict, migration and increased inter-state competition for resources”.

This blog picks up that geopolitical thread: how biodiversity loss shapes geopolitical arguments, and how those arguments shape the biodiversity agenda.

Defining the scope

To maintain clarity, biodiversity loss is not used here as a synonym for climate change or water scarcity, nor is geopolitics a catch-all for war or civil unrest. Notably, the UK government rates its confidence in ecosystem degradation trends as high, and its confidence in the explicit security consequences lower.

We focus on the geopolitics of how states compete and cooperate over resources, territory, and trade: access agreements, trade measures, supply control, and neighbourly relations. By biodiversity loss, we mean the decline in the variety and abundance of living organisms and ecosystems across the five drivers identified by IPBES: land and sea use change, direct exploitation, climate change, pollution, and invasive species (note that we use the narrower biodiversity loss rather than the broader ‘nature loss’ to keep this piece tractable).

A multiplier, not a cause

Biodiversity loss rarely creates disputes between states from scratch. In the examples below, political competition existed long before ecological baseline measurements began. This distinction matters: a root cause would require a brand-new peril, whereas a risk multiplier loads frequency and severity onto perils already written, priced, and underwritten.

Underlying these disputes sits a simple feedback loop: extraction degrades a living resource, degradation increases the effort required to extract what remains, and higher effort degrades the resource further. This becomes geopolitical the moment a state acts – whether by defending access to depleted assets or regulating production methods. What changes is not whether states argue, but what they argue about and which policy instruments they reach for.

The South China Sea

This dispute has been active for nearly 80 years and involves competing territorial and maritime disputes by six governments (China, Vietnam, the Philippines, Malaysia, Brunei and Taiwan) over islands, reefs, and resource-rich waters. Biodiversity loss did not cause the conflict. As such it serves as an ideal baseline for us to start exploring the risk multiplier effect.

Geopolitics shaping biodiversity loss

To press territorial claims, claimants dredged reefs and constructed artificial islands. The Center for Strategic and International Studies' (CSIS) Asia Maritime Transparency Initiative (funded partly by the US and Taiwan, itself a claimant) estimates over 6,200 acres of reef destroyed by island-building, roughly three-quarters attributable to China and the next largest share to Vietnam.

In 2016, an arbitral tribunal under the UNCLOS (United Nations Convention on the Law of the Sea) found that construction at seven disputed features had caused severe harm to the coral reef environment – these reefs support roughly a quarter of marine species and underpin regional fisheries and tourism economies. China declined to participate and rejected the ruling. That finding marked how far ecological damage has travelled – from a scientific concern to a formal inter-state dispute.

Biodiversity loss shaping geopolitics

Fish stocks there are now estimated at 5% to 30% of their 1950s levels, in a basin accounting for roughly 12% of the global catch. As regional demand for fish rises, industrial fleets deploy increasingly destructive methods and commit zone violations. States increasingly deploy navies and coast guards for fisheries enforcement. The Stimson Center notes that fishing fleets have become explicit instruments of territorial assertion, creating a self-reinforcing cycle of ecological degradation and geopolitical instability.

The territorial claims did not arise from the fish, but scarcity has turned routine fishing into an act of sovereignty, making every encounter at sea more consequential.

Unilateral and multilateral levers

Beyond direct territorial friction, states contest natural resources through trade levers, commons governance, and subsidy reform.

The EU Deforestation-Free Regulation (EUDR)

The EUDR requires importers to prove that commodities such as palm oil, soy, cocoa and timber are not linked to deforestation. Indonesia and Malaysia – producing 85% of global palm oil – filed WTO complaints, froze trade talks, and condemned the rules as ‘green protectionism’ before Malaysia then secured a major supply deal with China.

While European regulators view the law as essential supply-chain accountability, producer states argue it places disproportionate administrative burdens on smallholders. Implementation was postponed to December 2026 for large and medium operators – announced alongside an EU-Indonesia trade agreement – officially due to IT filing delays (which prevented operators from registering and filing required paperwork). Unilateral environmental trade measures risk redistributing trade to less regulated markets rather than reducing global degradation, straining trade alliances in the process.

The High Seas Treaty (BBNJ)

Entering into force in January 2026, the BBNJ agreement creates a legal framework for protecting biodiversity in international waters. Its two-decade negotiation centred less on conservation mechanics and more on equitable access to marine genetic resources (MGRs). Developing nations advocated treating MGRs as common human heritage with mandatory monetary and data sharing, while high-tech maritime nations argued for high-seas freedom.

The consensus shifted the focus from resource ownership to benefit-sharing mechanisms. BBNJ is ultimately a contest over who shapes the rules for the global commons and who captures value from ocean biodiversity. At the time of writing, roughly half of UN member states are not yet party to the treaty, and its first conference of parties is not until January 2027. BBNJ's practical force is still unproven.

WTO Agreement on Fisheries Subsidies

Adopted in 2022 and entering into force in September 2025, this agreement prohibits subsidies for illegal, unreported, and unregulated (IUU) fishing, overfished stocks, and unregulated high-seas fishing. To achieve consensus among 166 members, major subsidising nations deferred deeper rules against fleet overcapacity to a phase two. A built-in termination clause mandates that if the phase two rules are not finalised by September 2029, the entire agreement lapses. This clause prevents major distant-water fishing states from banking early concessions while avoiding structural reforms, illustrating how subsidy policy shapes global access to marine economies.

Whether operating through unilateral trade bans or complex multilateral frameworks, these governance tools show that policy on paper can turn into strategic leverage in practice. What gets adopted and what gets changed are not the same event. Yet regulating extraction and trade is only half the picture. When states move from controlling resource use to actively funding and executing ecological restoration, a different set of geopolitical dynamics unfolds, where simple metrics can obscure both functional failure and strategic intent.

The paradox of restoration metrics

“Not everything that can be counted counts, and not everything that counts can be counted.” Restoration initiatives are not immune to geopolitical friction. Single-variable metrics can mask ecological limits.

China’s Three-North Shelterbelt Programme

Launched in 1978 as the world’s largest afforestation effort, the ‘Great Green Wall’ aimed to halt desertification and reduce Beijing's dust storms. While official accounts report tens of billions of trees planted and reduced dust events, early decades relied on fast-growing monocultures (poplar and willow). A 2026 study in Scientific Reports demonstrates in long-term arid shelterbelts, single-species shelterbelts often produce canopy without natural forest structure, driving water-table depletion, soil salinisation, and declining ecological function. Hectares planted and resilient ecosystems gained are vastly different metrics.

Geopolitically, China has exported this desertification expertise across Central Asia, the Arab League, and Africa. However, extending shelterbelts into Mongolia raised diplomatic concerns in Ulaanbaatar regarding sovereignty and territorial narrative. Consequently, both sides reframed joint efforts away from defensive ‘walls’ toward shared ‘ecological security barriers’ – demonstrating how green infrastructure acts as both a vehicle for regional soft power and a flashpoint for border anxieties.

Southern Africa’s elephant populations

Following the 1989 CITES ban on the international ivory trade, elephant numbers rebounded in Botswana, Zimbabwe, and Namibia – assisted by regional stability and refuge-seeking migration from neighbouring states. In 2024, it was estimated that Botswana hosted roughly 130,000 elephants (a third of Africa's savanna total). Along the Chobe River, dry-season elephant densities are high enough that debarking and felling outpace regrowth, converting dense riparian woodlands into open scrub, stripping mature Acacia trees and reducing habitat for other wildlife. Maximising single-species recovery does not automatically equal ecosystem health, and can even compromise broader biodiversity.

Politically, Southern African nations have long argued at CITES that well-managed herds should be sustainably monetised through trophy hunting and controlled sales to support rural communities facing severe human-wildlife conflict. When Germany's environment ministry proposed restricting trophy imports in 2024, Botswana's President Masisi threatened to send the country 20,000 live elephants. Though rhetorical, the exchange highlighted a deep post-colonial rift: sovereign nations rejecting Western import rules that dictate conservation ethics from afar while local populations bear the physical safety and economic costs of living alongside wildlife.

The cases across land and sea yield a consistent lesson: nature cannot be managed or governed through oversimplified metrics. The harder question they raise is not whether restoration works, but whether we are even counting the right things at all – a problem compounded by the difficulty of modelling non-linear ecological systems.

Conclusion: Navigating ecological and sovereign realities

The evidence across land and sea yields a consistent lesson: nature cannot be managed or governed through oversimplified metrics. Unlike net zero, which possesses a universal accounting unit in CO₂ equivalents, nature-positive has no equivalent, universally agreed metric. Where states reduce restoration to raw hectares or target population headcounts, or attempt to enforce environmental standards through rigid trade mandates, ecological realities inevitably assert themselves – frequently through geopolitical friction.

This explains the horizon paradox identified by the WEF and the IFoA. On paper, ecosystem collapse appears as a distant 10-year risk. In practice, because natural resources overlap with national sovereignty, trade corridors, and local livelihoods, biodiversity loss rarely waits a decade to trigger instability. It acts as a sudden risk multiplier, transforming depleted fish stocks into naval standoffs, forest regulations into trade disputes, and wildlife management into battles over sovereign rights.

Whether the task is advising on sustainability policy or judging whether a green project is bankable, investable, or insurable, the geopolitical dimension rarely shows on the ecological face of the asset. A restoration scheme can be scientifically sound yet still become an instrument of state influence. A commodity can be legally harvested yet still be caught by another nation's environmental trade barrier.

Planetary Solvency puts it plainly: for actuaries and the broader financial sector, nature and biodiversity cannot be ignored. For risk analysts and policymakers, viewing ecological degradation purely as a long-term environmental asset issue misses an important vector through which it hits balance sheets today: state action. As Earth systems approach critical tipping points, navigating the ‘wild unknown’ will require recognising that ecological solvency, financial stability, and geopolitical security are inextricably linked.

Afterthought

None of this is to suggest that biodiversity loss will directly cause inter-state war – only to observe that these diplomatic arguments are already underway, and that the erosion of living systems is quietly changing their terms.

All the examples examined in this blog remain active and evolving: treaties awaiting full implementation, rules being negotiated, and ecological impacts being measured over decades. This mirrors the pattern we highlighted at the outset: a threat near the top of the 10-year risk horizon that remains underpriced in the two-year view. That is precisely the kind of risk worth watching before it arrives, rather than accounting for after the impact.

The case studies presented here are necessarily selective. Each example holds rich layers of nuance and stories within stories – such as Indonesia's domestic export bans to protect palm oil value chains, or China's strategic resource trade with Mongolia. Our goal has been to offer a balanced commentary while highlighting the high-level mechanisms most relevant to risk management.

As part of this working party's research, we encountered many more instances where the biodiversity agenda intersects with statecraft – from transboundary water politics along the Mekong and Central Asian river basins to bilateral fisheries access agreements between the EU and West African nations. Each of these topics deserves its own detailed exploration, alongside other emerging themes at the intersection of nature, finance, and geopolitics, which we look forward to sharing in future research posts.