Business
Recognising natural capital
Natural capital must be recognised as critical national infrastructure to futureproof the economy.
9 January 2026
Europe faces rising climate-related damage costs, growing pressure on public finances and renewed debates over competitiveness and security.
Fully implementing the EU Nature Restoration Regulation is not just legal obligation, but a strategic investment in Europe’s health, security and economic resilience.
This is the headline finding of a new scientific commentary from the European Academies Science Advisory Council (EASAC).
The Commentary finds that the estimated cost of restoring Europe’s degraded ecosystems – around EUR 150 billion – is outweighed by benefits at least 10 times higher, through avoided disaster losses, improved public health, greater climate resilience and strengthened food and water security.
‘Nature restoration is not an environmental luxury. It is basic risk management. At a time when Europe is spending billions responding to floods, droughts, wildfires and health impacts, restoring ecosystems is among the smartest preventive investments we can make.’
PROF. THOMAS ELMQVIST
EASAC Environment Director and lead author
Europe’s natural systems are already heavily degraded. Only 1.4% of Europe’s forests remain untouched, and just 3.3% of land experiences minimal human intervention, according to the Commentary.
These losses are directly linked to rising flood damage, declining soil fertility, weakened forest carbon sinks and growing wildfire risk.
Long-standing economic models that treat nature as expendable no longer reflect scientific evidence.
Healthy ecosystems underpin our economy. They protect infrastructure, stabilise food systems and reduce public spending on disaster response and healthcare.
‘Ignoring the economic role of nature is a serious economic and strategic mistake. Neo-classical economics continues to downplay the role of nature and biodiversity in economic development. But when ecosystems fail, the costs are borne by citizens, insurers and governments.’
PROF. THOMAS ELMQVIST
EASAC Environment Director and lead author
The Commentary identifies immediate, high-impact restoration actions in three key ecosystems: agricultural landscapes, forests & peatlands.
Regenerative agriculture can restore soil organic matter, biodiversity, water retention and climate resilience while sustaining yields. Priorities include diversified crop rotations and intercropping, cover and perennial crops, reduced tillage, agroforestry, landscape elements and integrated pest management (IPM). Policies should reward measured outcomes including carbon stored in soil, biodiversity and water regulation gains.
The forest carbon sink is weakening due to climate stress and harvest pressure. Close-to-nature forestry, mixed-species and mixed-age stands, habitat protection and landscape-level fuel management can reduce wildfire risk and rebuild resilience. Bioenergy incentives should prioritise genuine residues and cascading use of biomass, while restoring forest carbon stocks to meet land use, land use change and forestry LULUCF targets.
Rewetting drained peatlands can sharply cut emissions, lower wildfire risk, improve water retention and restore biodiversity.
The Commentary advises that nature and finance should be treated as a strategic asset.
Europe’s natural assets – soils, biomass, peatlands, wetlands, rivers and marine ecosystems – are essential for carbon storage, water regulation, biodiversity and food and energy security.
These assets must be systematically recognised, measured and financed as strategic priorities.
Cross-sectoral policy coherence and governance must be delivered at the same time, the Commentary warns. Nature restoration cannot be delivered in isolation; it requires coherence across agriculture, forestry, water, energy, marine and urban systems, supported by clear institutional mandates and accountability.
Mainstream preventive restoration is cited as the most effective and efficient way to reduce disaster risks, protect assets, shield our economy against climate extremes and enhance Europe’s resilience and strategic autonomy.
EASAC warns that weakening or delaying the Nature Restoration Regulation’s implementation would increase Europe’s exposure to climate extremes, economic losses and health impacts.
‘As scientists, we are alarmed by the accelerating reversal of critical environmental and climate protections. Environmental rollbacks do not eliminate costs, rather, they merely shift them forward. It is vital that Member States concentrate on fulfilling the Regulation’s objectives instead of seeking to weaken its provisions.’
PROF. FIONA REGAN
Co-chair of EASAC’s Environment Steering Committee
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