The Importance of Planetary Boundaries in Modern Economics

The planetary boundaries framework is slowly making its way into conversations traditionally dominated by GDP-focused economics. As the planet’s finite resources become increasingly clearer each year, businesses are beginning to prioritize how to operate within Earth’s systems.

This shift is underscored at the ongoing World Economic Forum in Davos, where “building prosperity within planetary boundaries” is a central theme.

Understanding Planetary Boundaries

In essence, this concept encourages leaders to reframe prosperity by investing in and enhancing new energy, nature, and water systems.

But what exactly do we mean by planetary boundaries and planetary health? Here’s a quick overview.

What is Planetary Health?

The Rockefeller Foundation-Lancet Commission introduced the concept of planetary health in its 2015 report, defining it as “the health of human civilization and the state of the natural systems on which it depends.” In simpler terms, human well-being relies heavily on the health of our planet, which provides essentials like food, fuel, and water.

When Earth’s health deteriorates, so does human health—impacting us physically, mentally, socially, and politically. The economic implications of this connection could cost trillions globally.

Defining Planetary Boundaries

The term “planetary boundaries” was first introduced by the Stockholm Resilience Centre in 2009 and was updated in 2020. This framework estimates a safe operating space for humanity concerning Earth’s functioning.

According to the Planetary Health Check, these boundaries serve as scientifically defined “guardrails” ensuring the Earth’s health. There are nine interdependent boundaries that help maintain the planet’s stability.

For instance, healthy soil plays a crucial role in retaining water, filtering pollutants, fostering biodiversity, and recycling nutrients crucial for crops. However, various harmful practices can damage these soils, extending their negative impact to the ozone layer.

Alarmingly, we have now breached seven out of the nine boundaries.

Why Are Planetary Boundaries Significant?

Just like guardrails keep vehicles safely on the road, planetary boundaries help maintain a safe operating environment for human existence. The Rockefeller/Lancet report states that breaching these boundaries threatens our survival.

Environmental degradation has prompted some to label the climate crisis a public health crisis. In 2026, many also recognize its potential to initiate an economic crisis. A recent report from the World Economic Forum highlighted:

• Climate-related health risks could result in a $1.5 trillion loss in global productivity by 2050.
• Food and agriculture could see a $740 billion decrease in output, affecting food security.
• Healthcare is expected to lose about $200 billion due to climate-related health issues.
• The insurance industry may experience a sharp increase in climate health claims.

“We are nearing tipping points that can lead to irreversible changes undermining economic development,” warned Johan Rockström, director of the Potsdam Institute for Climate Impact Research, during the WEF 2025 Sustainable Impact Development Meetings.

Can Technology Provide Solutions?

Yes, particularly in fields like agriculture, energy, and manufacturing. The WEF has recently highlighted several innovative technologies that could help restore essential ecological processes:

• Precision fermentation can create meat and dairy alternatives without livestock, drawing significant investor interest.
• Green ammonia production offers a way to decarbonize agriculture using onsite, electrochemical methods.
• Automated food-waste upcycling technologies help divert food waste for composting or other uses.
• Methane capture technology can sequester CO2 from landfills and livestock manure.
• Earth observation via satellites and drones can monitor critical metrics like soil health and water levels.
• Combining soil health technologies with AI can improve crop yields while reducing emissions and fertilizer use.

André Hoffmann, vice chairman of Roche Holding and interim co-chair of WEF, emphasized the link between planetary health and economic success at Davos, stating: “More than half of all global GDP depends on nature. If you have no nature, you have no humanity, no business, no dividends, and no shareholders.”