Modeling the links between biodiversity, ecosystem services and human wellbeing in the context of climate change: Results from an econometric analysis of the European forest ecosystems

This paper constitutes a first attempt to model the relationship between climate change, biodiversity, and ecosystem services, with a specific emphasis on European forests. Firstly, we construct a composite biodiversity indicator that integrates quantitative and qualitative changes of biodiversity projected to 2050 for the EU-17 under future IPCC scenarios. Secondly, this indicator is integrated into two simultaneous equation models to capture the marginal impacts of changes in biodiversity on the value of ecosystem goods and services (EGS) due to climate change. timation results confirm the role of biodiversity as a nature-based policy solution for climate change mitigation, shedding light on the policy actions that generate co-benefits by enhancing ecosystemsʹ capacity to mitigate climate change impacts, while conserving biodiversity and sustaining the flows of EGS for human livelihoods. Especially, nature-based mitigation policies are more cost-effective and better at coping with the ethic and inequality issues associated with distributional impacts of the policy actions, compared to the pure technical solutions to improving energy efficiency and reducing emissions. However, the strength of biodiversity as a nature-based policy option for climate change mitigation depends on both the nature of the EGS and the geographical area under consideration.