Today, the world has already moved beyond 6 out of 9 planetary boundaries (Richardson et al., 2023), which indicates that the natural conditions of life on our planet are becoming less suitable for a prosperous and sustainable existence of mankind. There is an obvious need for radical changes in the global unstable economy, adequate responses to the escalating environmental challenges, and the search for new ways to improve well-being.

Environmental degradation and its consequences are a major concern in today’s global discussions. The Global Risk Report (World Economic Forum, 2023, 2024; Elsner et al., 2025) published by the World Economic Forum (WEF) divides the environmental risks into five categories: Economic, Environmental, Geopolitical, Societal and Technological. Even in conditions of geopolitical and social turbulence, the long-term risk rankings with a 10-year time horizon have identified these risks as some of the most critical. Never before have the economic reports of the World Economic Forum registered as highly significant the risks from loss of biodiversity, ecosystem degradation, and changes in the planet’s biosphere. (Table 1).

Economic loss caused by environmental damage is usually estimated using the theory of ecological services, which refers to the benefits that people receive from nature. The concept of ecosystem services began to take shape in the 1960s and 1970s, laying the groundwork for their development. At that time, two new areas of economics directly related to ecology were formed: ecological economics and environmental economics. This led to the publication of a number of outstanding research papers (Barnett & Morse, 1963; Daly, 1968; Holling, 1973). In the United States, the movement to protect nature gained momentum, and the first publicists’ works began to appear that described the link between environmental issues and economic activity. (Boulding, 1966; Carson, 1962; Pearce, 2002; Røpke, 2004). New trends in ecology, economics and public consciousness could not but influence political decision-making. In 1972, the Declaration of the United Nations Conference on the Human Environment was adopted (United Nations, 1973). The Declaration stated that in the future, society would have to be guided not only by economic, but also by social and environmental considerations, such as the limited availability of natural resources, capacity of the environment to absorb pollution, and problems of inequality and population growth. The approval of this document is seen as the starting point for defining the concept of sustainable development, which also encapsulates the main principles guiding human progress in the 21st century. B. Ward was the author of the term “sustainable development”, which implied a balance between environmental, social and economic parameters in order to avoid the threat of deterioration in the quality of life of future generations (Ward & Dubos, 1972). In 1973, F. Schumacher introduced the term “natural capital”, which was understood as a set of exhaustible and inexhaustible natural resources, and ecosystem services (Gómez-Baggethun et al., 2010).

In the 1970s and 1980s, two new concepts of “weak” and “strong” sustainability emerged (Du Pisani, 2006). D. M. Hartwick (1977) and R. Solow (1986) became the progenitors of the “weak” sustainability concept. At the same time, scientists working in the field of ecological economics, such as the already mentioned N. Georgescu-Regen (1979), H. Daly (1992), as well as G. Daily (1997) and R. Costanza (1992), developed the “strong” sustainability approach, which implies that natural and technological capital are complementary, but not interchangeable. Thus, the ideas of “weak” and “strong” sustainability have been developed as two alternatives to the technogenic type of development. R. Constanza et al. introduced one of the first classification of ecosystem services in their 1992 seminal study, “The Value of the World’s Ecosystem Services and Natural Capital.” Constanza and co-authors have developed an ecosystem approach to classifying ecosystem services. Ecosystem services, according to this approach, are derived from a combination of natural capital, infrastructure, and human capital. Constanza identified 16 ecosystems and 17 ecosystem services, such as climate regulation, soil formation, waste recycling and others.

In the 2000s, three widely accepted classifications of ecosystem services were developed: MEA 2005, TEEB, CICES.

1. The classification given in the MEA (Millennium Ecosystem Assessment, 2005) identifies four types of ecosystem services: provisioning services; regulating services; habitat or supporting services; cultural services.

2. TEEB Classification (Kumar, 2012). The difference between the TEM classification and the MA classification is that the supporting services are not distinguished separately, but relate to ecological processes.

3. The classification of the European Environmental Protection Agency (CICES), the first version of which was published in 2012 (Haines-Young, 2013), is based on two earlier classifications (Haines-Young & Potschin, 2018). Economic assessment of ecosystem services is carried out by combining economic, socio-cultural, scientific and integration methods. Currently, ecosystem services are assessed at the national level in all the BRICS countries (Abd Elbasit et al., 2021; Bukvareva et al., 2020; Lahon et al., 2023; Niu 2024; Parron et al., 2019).

About 75% of the Earth’s ecosystems have been significantly altered as a result of human economic activity. The ecosystems that have been practically untouched by humans are located in boreal zones, desert areas and semi-desert areas, i.e., in natural areas that are of little use for economic activity. Today, the forest area is only 30% of the total land surface. Since 1990, the total forest area has decreased by 10% as a result of the transfer of these territories to other types of land use. Wetlands, which provide humanity with the most important provisioning and regulating services connected with access to fresh water and prevention of natural disasters such as fires, have been most severely affected. According to experts, the economic damage caused by the loss of crops, forests and property as a result of fires amounted to $14-15 billion, or about 1% of Russia’s GDP. Taking into account the loss of human lives and the deterioration of public health, the total damage may increase to 2% of GDP (Bobylev, 2021). In January 2025, wildfires continued in the United States. Estimated economic damage from fires in California at the beginning of January 2025 amounted to more than $ 50 billion (Reuters, 2025). It is predicted that by the end of the 21st century the share of preserved natural ecosystems will be around 10%. At the same time, the share of degraded land will be over 20% (UNDP, 2021). With the continued rapid loss of natural ecosystems, humanity will suffer increasingly significant socio-economic losses.

In 2021, the World Bank published the report “The Economic Case for Nature”, which assessed the economic damage from the loss of ecosystem services for different regions of the world (Johnson et al., 2021). According to the World Bank calculations, the total value of ecosystem services is 44 trillion US dollars. Construction and agriculture (US$13 trillion), tourism, real estate and retail (US$31 trillion) were named as the main beneficiaries of ecosystem services. Other economic sectors that are significantly dependent on ecosystem services include forestry, fishing, manufacturing and healthcare (Scholze et. al., 2023).

Several obstacles hinder the unified international economic assessment of ecosystem services: 1) the difficulty of combining terminology from different fields of knowledge, such as economics and natural sciences: ecology, biology, soil science and others; 2) the lack of a common understanding of ecosystem services as a flow that can be formed and maintained, increased and degraded; 3) the complexity of applying a single methodological concept for assessing ecosystem services for different types of ecosystems: marine and terrestrial, artificial and natural; 4) the difficulty of applying a unified methodology for assessing ecosystem services for lands with different types of economic activity: agricultural, protected areas, forest and others; 5) political interest in different objects, methods and results of assessment.

Research has shown that the rates of degradation of ecosystem services and the risks of their loss are uneven. Developing economies suffer the greatest economic damage from the degradation of natural ecosystems. In this regard, the BRICS organization, as a group of leading countries with transforming economies, needs to implement economic measures to protect and enhance its environmental potential. This will allow the BRICS member countries to capitalize on their resources and gain significant benefits.

The purpose of this work is to justify the phased implementation of a mechanism for capitalizing ecosystem services in order to compensate the BRICS countries for the cost of conserving ecosystems and maintaining their role as a global environmental contributor. The research hypothesis is that the mechanism for capitalizing ecosystem services will contribute to the restoration and conservation of the BRICS countries’ ecosystems, which will compensate for long-term national and global economic damage.

The paper has the following structure:

The concept of ecosystem services has been defined in various ways. This paper adheres to the “classical” definition provided by the United Nations Development Programme (UNDP), which aligns closely with economic terminology: ecosystem services are understood as the benefits people receive from ecosystems (UNDP, 2021).

The BRICS countries play a significant role in preserving global public goods and providing essential environmental services for the entire planet. In general, their combined ecological system functions as an ecological “donor” to our planet. The future of humanity’s survival and transition to sustainable development depends largely on the preservation of this system.

It is possible to identify factors that determine the important role of the BRICS countries’ ecosystems on the global scale, as well as the measures for capitalizing ecosystem services.

1. The BRICS countries have preserved the world’s largest areas undisturbed by economic activity (Table 2). These areas are the main regulator of planetary sustainability, much more powerful than, for example, the vast undisturbed desert regions of Australia. In Russia, the territories not disrupted by economic activity make up about 60-65% of the country’s area, in Brazil – 28%, in China – 20%.

2. The BRICS countries own the largest forest area in the world, accounting for about 40% of the world’s forested area (Table 3). This forest area significantly affects the regulation of the Earth’s climate system, the global water cycle, conservation of global ecosystem services, and specific biodiversity of the Earth. It can therefore be useful to develop a common forest policy for the BRICS countries in order to strengthen their environmental position in the world and create the image of ecological donors of the planet.

3. The BRICS countries possess vast water resources, with Brazil and Russia having the largest reserves in the world. The Russian Lake Baikal alone contains approximately 20% of all fresh water on the planet. This factor is of the utmost importance, considering that the current shortages of water will worsen in the near future. The problem of global water scarcity is perhaps even worse than climate change, whose main impact will be felt later than the exacerbation of water issues.

4. There is a huge reserve of biodiversity on the territory of the BRICS countries; there are unique ecosystems that preserve rare species of flora and fauna that are a planetary treasure. The protected areas of the BRICS countries account for about 20% of all protected areas in the world (Our World in Data, 2025b). Some of them are included in the list of the world natural heritage sites by the world community and have the status of biosphere reserves.

5. An important feature of the BRICS countries is the presence of large areas of wetlands, including swamps, marshy areas, and waterlogged land. Brazil, Russia, and China have some of the largest wetland areas in the world: they are among the top five countries with extensive wetlands. (Ramsar, 2025). Temperate wetlands serve as cold carbon traps, which is very important for climate stabilization. Boreal wetlands, including tundra in the Arctic, have more fixed carbon content than tropical forests due to the slow process of organic matter decomposition compared to that in tropical forests. Many wetlands have been preserved in Brazil.

According to the World Bank’s 2021 report, ecosystem services have the greatest value for low-income and lower-middle-income countries because these countries have a low level of urbanization, and a high share of their income comes from economic sectors that are directly related to renewable natural resources such as agriculture, forestry and fishing. Ecosystem services are also of particular importance for countries with extended coastal zones.

With complete loss of ecosystem services, annual GDP losses would amount to 10% for low-income countries and 7.3% for lower-middle-income countries, while the global average would be around 2.3% (Figure 1).

The highest rates of economic loss from ecosystem service degradation are typical of the African region (9.7%) and the South Asian (6.5%) region. Also, the countries in East Asia and the Pacific region (3.4%), and the Middle East countries (3.3%) will suffer significant annual GDP loss as a result of ecosystem service collapse. Europe and Central Asia, and North America will have the lowest losses, at 0.7% and 0.5%, respectively.

The UN estimates show that consumption has tripled over the past 50 years and will continue to grow. The largest environmental footprint from consumption is typical of the developed world. In high-income countries the material footprint of consumption was 60 percent higher than in upper-middle-income countries, and 13 times higher than in low-income countries. The overall increase in consumption is mostly driven by the developing countries, as evidenced by the largest extraction of living biomass (crops and fish resources) (UNDP, 2021).

It can be inferred that the current increase in consumption and well-being in advanced economies is based largely on the exploitation and loss of natural ecosystems and biodiversity in developing countries. If the current situation persists, 46 million hectares of natural ecosystems will have been lost by 2030 as a result of their transformation into land used for the agricultural and forestry industries, the fishing resources will deplete by 2.8%, and the global GDP will decrease by 90 billion US dollars. To reduce the environmental impact, it is advisable to consider allocating subsidies for agriculture in order to promote more environmentally friendly farming methods. It would also be beneficial to introduce global payments encouraging decarbonization and invest in scientific research. This would ensure a global GDP growth of 150 trillion and significantly reduce loss of ecosystem services.

In 2021, the UNDP released a report with economic and management recommendations for the conservation of ecosystems and biodiversity, aimed at governments, intergovernmental organizations, financial institutions, private businesses, non-governmental organizations, educational institutions and the general public. At the intergovernmental and governmental levels there is a need to reform economic, financial and tax systems to include natural capital and environmental costs. The UN also advises to reform subsidies to eliminate socio-environmental risks. In addition, it is recommended to invest in the best available technologies (BAT) to achieve sustainability and the greatest circularity of the economy.

Based on the current negative trends, we can conclude that when developing and selecting economic measures to conserve and restore ecosystems and biodiversity, the interests of the main beneficiaries of ecosystem services – developing countries and those with transforming economies – should be given priority. For this purpose, the BRICS countries need to evaluate their ecosystem services and also develop measures to capitalize on these services to better protect their interests and those of other developing nations in the international community.

In the Russian Federation, the importance of assessing and capitalizing on ecosystem services has been recognized for quite some time at the highest level. Back in 2017, Russian President Vladimir V. Putin stated that Russia is a global ecological donor and instructed the Russian Ministry of Natural Resources and Ecology and the Russian Foreign Ministry to develop compensation mechanisms for the export of ecosystem services (Kremlin, 2017).

In 2020, a monetary assessment of the cost of certain ecosystem services in Russia was carried out (Bukvareva et al., 2020). According to the results of the study, the cost of certain groups of ecosystem services ranged from 1.4% to 3.5% of GDP, and for some regions this figure exceeded 10%.

Within the BRICS, Russia is actively working to develop joint strategies for promoting sustainable development and addressing climate change. In 2023, the Russian Minister of Economic Development Maxim G. Reshetnikov initiated the creation of a new institutional structure within the BRICS – the Contact Group on Climate and Sustainable Development. The new group will host events to share best practices in low-carbon development, promote ESG goals, and discuss responsible consumption models. (TASS, 2023). The first meeting of the group took place on April 2nd, 2024. During this meeting, Russia presented its priorities for climate cooperation in 2019 and the parties discussed issues related to sharing experiences and fostering scientific collaboration in resisting the climate change. (BRICS-Russia, 2024). The group’s immediate task is to sign a memorandum on the BRICS carbon markets and establish areas for joint research. The harmonization of carbon regulations of the BRICS countries is to be achieved by 2030. At the first stages, it is planned to find common ground for further coordination of approaches to such regulation. To work on the climate agenda, Russia has initiated the creation of the BRICS Climate Research Platform. The goal of the platform is to “organize joint scientific and expert activities, prepare research and reports on climate topics, and hold specialized events” (BRICS-Russia, 2024).

Moreover, a “Task Force on ESG and Green Finance” has been created within the BRICS Business Council. Two main initiatives were developed and agreed upon within this group in 2024: “The BRICS Transition Finance Concept” and the “Agreement on the Establishment of the BRICS Expert Association on Sustainable Development”. The “Task Force on ESG and Green Finance” has recommended forming a new expert association for sustainable development to tackle methodological issues in its initiatives. (RBK, 2024).

It is important to note that the BRICS Climate and Sustainable Development Contact Group is supported by government agencies, such as the Russian Ministry of Economic Development. The private sector in the BRICS countries works with the Task Force for Environmental, Social, and Governance (ESG) and Green Finance. In 2024, Gazprombank was the chairman of the target subgroup on the Russian side.

It is clear that the BRICS association is actively working to build an expert knowledge base. The questions related to the capitalization of ecosystem services will be discussed in specially created councils.

The following six economic instruments for ecosystem conservation and restoration of ecosystem services are already in use globally:

These instruments were summarized by the authors based on real political agreements and business strategies (Global Sustainable Tourism Council, 2025; Tamboli et al., 2023; World Bank, 2025). The first three instruments are associated with the potential capitalization and realization of many environmental advantages of the BRICS countries.

Instruments 5 and 6 – “payment for genetic materials” and “debt-for-nature swap – have been actively discussed at the international level in 2024. In 2023, the Kunming-Montreal Global Biodiversity Framework as part of the UN Biodiversity Conference (CBD COP15) was adopted in Canada to deal with the issues related to payment for genetic materials. It set goals that can be summarized as “30-30-30”: the restoration of at least 30% of degraded areas of terrestrial, inland water, marine and coastal ecosystems and the conservation of at least 30% of terrestrial, inland water, marine and coastal areas by 2030 (UN, 2022).

In the Kazan Declaration dated October 23, 2024, the BRICS countries emphasized the importance of the Kunming-Montreal Global Framework for the Conservation of Biodiversity and called on “developed countries to ensure the provision of sufficient, efficient and easily accessible financial resources to developing countries for the conservation of biodiversity and rational use” (BRICS-Russia, 2024).

As one of the ways to monetize ecosystem services, the Kunming-Montreal Global Framework laid the foundations for the distribution of monetary and non-monetary benefits from the use of genetic resources. Already in 2024, at COP16 in Cali (Colombia), it was decided to create a global fund to accumulate financial resources from the use of digital genetic information obtained from samples of natural organisms. Cosmetic, pharmaceutical and other companies in the bioeconomy sector that use this information to develop products will have to channel part of their profits to the Cali Fund, from which resources will be distributed to indigenous peoples and local communities directly or through governments (UN, 2024). As is well known, “more than 28,000 plant species are currently recorded as being of medicinal use and many of them are found in forest ecosystems” (FAO,2020).

Another mechanism that is currently gaining popularity is “debt-for-nature swap”. From a legal point of view, there is a dispute about its correct name. It would be more accurate to call it “country debt conversion with associated sustainable development funding.” (March, 2024). But the essence of the “debt-for-nature swap” is that the government debt is refinanced, and the money saved is used to protect nature.

In 2024, three countries have arranged “debt-for-nature swap” deals: Barbados, the Bahamas and El Salvador. Barbados signed a deal with the Inter-American Development Bank and the Green Climate Fund. As a result, the country will receive $125 million to modernize its wastewater treatment plants. This should reduce pollution entering the Caribbean. (Reuters, 2024a). JPMorgan Chase & Co. completed a $1 billion refinancing deal for El Salvador, which is equivalent to about 14% of the country’s debt. It enabled the country to allocate $352 million for the conservation of the Rio Lempa, El Salvador ‘s main river, and its watershed (White, 2024). The Bahamas made a deal with Standard Chartered, allowing them to allocate $120 million to fund the conservation and management of their oceans and mangrove forests. Prior to this, debt-for-nature swap deals were also made by Ecuador (2023), Gabon (2023), Belize (2021), and Seychelles (2016) (Reuters, 2024b).

The BRICS countries should pay attention to these mechanisms and explore the possibility of using them within the framework of the newly created councils: the BRICS “Contact Group on Climate Change and Sustainable Development” and the “Task Force on ESG and Green Finance”.

By analogy with the carbon credit market, the authors see the creation of a BRICS ecosystem service market as promising. To create such a market, it will be necessary for the BRICS countries to create and approve a unified methodology for the economic assessment of ecosystem services. Today, there is a a wide range of methods to assess each group of ecosystem services. The combination of these methods makes it possible to consider the economic, environmental, social, and administrative aspects of the natural object being assessed, as well as the limitations of research. Many of the BRICS countries have already assessed ecosystem services at the national level (Bukvareva et al., 2020; Niu, 2024; Parron et. al., 2019; Abd Elbasit et. al., 2021). A joint group of scientists and other stakeholders from the BRICS countries will be needed to develop a set of methods and analyze the results of past assessments of ecosystem services.

A common BRICS ecosystem services database will enable the creation of the BRICS ecosystem services market, based on the following principle: for regions and/or economic entities, such as natural monopolies and large industrial enterprises, an acceptable level of environmental impact is calculated in special units and set by the government for several years ahead. This includes the amount of all types of pollutant emissions, volume of natural resources seized, area of land occupied and other parameters. This measure can help reduce the level of anthropogenic impact that accelerates climate change and thus mitigate climate risks. It should also prevent deterioration of natural objects, pollution of territories, and other types of environmental degradation. If the established level is exceeded, the region and/or the business entity must acquire the rights to it through purchase either (1) additional special units from the state at a fixed, high cost or (2) the saved special units from other regions and/or business entities, which, through modernization of production facilities or investment in the best available technologies (BAT), have reduced the negative impact on the environment. Methodology for evaluating investment projects should take into account both the current and projected states of ecosystem services.

However, when implementing strict “green” government regulations, it is important to take into account economic, environmental, and social factors in order to find a balance between the interests of the state, businesses, and individual citizens. The pricing of special units should ensure that the state has sufficient funds to invest in climate and environmental projects. However, the consequences of this measure should not damage the activities of Russian companies. For example, high prices of climate-friendly technologies can lead to an increase in electricity and heating tariffs, which in turn will raise the cost of goods and services for everyone.

That is why, the BRICS association needs an institutional, scientific, technical and expert base to make the most effective economic decisions and ensure targeted spending on environmental projects.

To address negative externalities and promote the well-being of regions and countries with rich natural resources and low population, the BRICS organization will need a system of payments from beneficiaries of ecosystem services. This will be done in accordance with the principle of internalizing externalities. The organization will use special tools to ensure that these payments are made to support the economic development and social welfare of these regions and countries. Examples of such compensation are quite widespread in the world (Frija et. al., 2021; El-Khalifa et. al., 2022; Lopes et. al., 2022). Hydroelectric power plants, municipalities, and enterprises using clean water often pay farmers whose lands are located upstream for the use of special agricultural technologies that prevent soil flushing, minimize the use of mineral fertilizers or prevent the flushing of livestock waste downstream. One of the most cost-effective examples of payments for ecosystem services was greater New York, where the high-quality water was ensured through payments to farmers, owners of natural sites. Such costs for the natural conservation of water quality by ecosystems turned out to be 2-3 times lower than the costs for the man-made version of water purification.

In our opinion, the establishment of the BRICS Ecosystem Services Fund has the potential to be a valuable financial resource for compensatory payments, where countries that cause ecosystem degradation could provide finances to help redistribute ecosystem services among the donor countries. Such a BRICS Fund can be used not only for internal repayment (internalization) of negative externalities, but also for the inflow of investments from outside. Economically viable “green” projects could be of interest to other nations and international commercial entities. Participation of BRICS in agreements that allow them to benefit from their environmental advantages (climate and water conservation, biodiversity protection and others) could lead to effective use of compensation payments from countries that cause negative externalities. In fact, we could be talking about the “quasi-globalization” of the BRICS Ecosystem Services market and Fund.

There is a need for a unified approach to payment mechanisms for ecosystem services at both national and international levels. Payments from other countries could be obtained through a payment/compensation mechanism for individual ecosystem services or through a “debt-for-nature” system. Implementation of these mechanisms will require the already mentioned unified methodology for evaluating BRICS ecosystem services, and a common database of valuation results. Such an approach will also need to be adopted by potential participants in the BRICS ecosystem services market, which is an ambitious long-term goal.

The proposed ecosystem services market has enormous economic potential and complementary positive effects. In the context described, the BRICS countries could establish scientific centres to assess ecosystem services, develop compensation mechanisms for ecosystem losses, and estimate investments needed for various projects. The BRICS partner countries and other developing countries could become potential markets for the services of these scientific centres. Properly organized, they could enhance the positive image and generate additional income for the BRIC countries.

Today, environmental problems are most critical for humanity. This is evidenced by negative trends and research by international organizations. In recent years, environmental risks have taken first place in the global risks reports of the World Economic Forum. More than 75 percent of all natural ecosystems have undergone significant anthropogenic change. Moreover, many countries annually suffer multimillion-dollar losses from catastrophic natural events. The BRICS countries play a role as a global ecological donor by providing essential natural resources and ecosystem services to the entire planet, thereby minimizing the negative environmental impact. This confirms the leadership position of BRICS in terms of forest area, wetland, water reserve, and the number of areas not affected by human activity. It should also be noted that developing countries and countries with transforming economies, thanks to their abundant natural resources, contribute significantly to the high standards of living in the developed world.

The authors consider it promising to create a BRICS market for ecosystem services to compensate for the damage caused by environmental degradation and the withdrawal of resources. This involves potential external buyers – countries or organizations. As the first step towards achieving this goal, a unified methodology for evaluating ecosystem services should be developed. Then, a common Fund for the ecosystem services of the BRICS countries could be established to provide financial support for projects that protect natural ecosystems and effectively implement climate policies. Then, a common fund for the ecosystem services of the BRICS countries could be established to provide financial support for projects that protect natural ecosystems and effectively implement climate policies. The financial resources of the Fund could be distributed to countries that are environmental donors. The Fund’s replenishment with finances may come from existing economic mechanisms, such as the sale of eco-friendly products (water and agricultural products), eco-tourism, grants from international organisations and individual countries, and various types of loans and credit for environmental purposes provided by international organisations and countries. Financial support of the Fund can also occur during the implementation of payment schemes for genetic materials or through “debt-for-nature swap. Thus, creating a market for ecosystem services in the BRICS countries and expanding it would make it possible to fund projects for preserving and restoring ecosystems in the member countries, which play an important role in ensuring the well-being of people in different parts of the world.